The Influence Of Family Control To The Corporate Performance Of Listed Companies

Since the reform and opening up, private companies have developed rapidly and played an integral role in the Chinese economic growth. The family business is an important part of China’s private economy that is a concentration of familial and enterprise as a whole set of concepts. Family control is the foundation of family businesses to realize the interests of the family, and the influence of family control are various aspects on the family businesses. The impact of family control on corporate performance has been a topic of debate for a long time in academia and practice fields. This article innovatively along "the family control, the core position, business performance" of the research angle to explore effects of family control on business performance. This article selected 268 samples as the research object from small and medium-sized board listed family firms in 2011 to 2013. The purpose is to discuss the influence of key position control on corporate performance, and the empirical study method is proposed to provide guidance and advice to family enterprises who are in transform and upgrade phase.Firstly, this article summarized three aspects of family-controlled, namely equity, board and key positions control, which will create a certain influence on enterprise performance. However, from pyramid structure, cross-shareholdings to realize control on enterprise performance, our predecessors have done very detailed research, and got a number of empirical results. Combining with board control and the key positions control, this paper will focus on chairman of the board properties, members of the family of directors in the proportion, manager office performance and their properties, chairman and manager for two if by one man. According to the predecessors’ related research, this paper puts forward the research hypothesis to research. Then, descriptive statistical analysis and correlation analysis the variables, multiple regression analysis was carried out on the assumption model, and the author build the robustness test for the four models to make the conclusion more reliability.This article analyzed the family control impacts on firm performance on the board and executives level. The empirical results show that:(1) The education of chairman have a positive impact to firm performance promotion, and the age of chairman has an inverted U-shaped relationship with corporate performance; (2) The number of family members on the board is the necessary means of family control. Higher family members share in the board will makes corporate performance worse; (3) Family members as general manager positions have a negative impact on business performance. The education background of general manager can promote enterprise performance, but the multiple regression result shows that the age has no significant impact on business performance; (4) When a person serving chairman and general manager position that has a negative impact on business performance.According to the above empirical results, in order to help the family listed companies to improve enterprise performance, the author put forward the following Suggestions:(1) The chairman of family firms are almosi all family members, and family firm has strong control on this position. The chairman of family listed companies need to improve their personal level of education continuously, learning more systematic knowledge to enhance their ability to produce a greater positive impact on enterprise development; The young business leaders have new ideas, strong learning ability and comprehensive analytical ability. Because old chairman have limited learning ability, when the chairman become older, he should retired, and let the young children to take over; (2) The Board may be appropriate to increase the proportion of non-family directors which helps to strengthen the supervision of the management; (3) Should hire more non-family members with higher education background as general manager that will bring more innovative ideas; (4) Chairman and general manager positions should be different people in order to avoid self-monitoring and dictatorship.