The Impact Of Family Involvement On Corporate Value

Family business is a special kind of private economy which is formed by the intersection of both the family system and business system. On the one hand, it plays a very important role in promoting China’s national economy development, but on the other hand, it is also faced with some problems in its own development. Being a key point to distinguish family business from non-family business, family involvement involves three important dimensions such as firm ownership, management and decision-making, and whether the family system can coordinate with business system to generate unique competitive advantages depends on the effectiveness of family involvement in business. Based on the core concept of family involvement and the120listed family firms from the year2010to2012, this paper discusses the dimensions and depth of family involvement and then explores their influence on corporate value with the empirically research. Meanwhile, the regulation effects of the firm size in these relationships are studied. All these aimed to provide guidance and advice to improve family firms value and successfully realize their transformation and sustainable development.Firstly, on the basis of the definition of related concepts, this paper puts forward the research hypothesis and theoretical model combined with the relevant literature and the basic theories in the field of family business, such as principal-agent theory, stewardship theory and resource-based view. Secondly, determine the selection of the sample and the measurement of the variables, and then collect the relevant disclosure data and information through the database of Tai’an, the listed family firms annual reports, the prospectus and the listing announcement. Thirdly, using the statistical software of EVIEWS7.0, this paper makes the descriptive statistical analysis of the sample and the fixed effect test of the model. In order to improve the accuracy of the analysis, some control variables are added to the test models, and the methods of changing the test approach and replacing the explained variables are used to further verify the authenticity of the research hypothesis and the reliability of the research conclusion. Lastly, based on the above, some suggestions for the improvement and optimization of family involvement are raised with the expectation to produce certain help to promote family enterprise value.The empirical results show that:Compared with the linear relationship, the nonlinear relationship can eventually explain the influence of family involvement on corporate value among Chinese listed family firms. At the same time, firm size plays a regulatory role in the effectiveness of family involvement.