Research On Relationship Between Power Allocation Of Family Members And Financial Performance In The Family Listed Corporation: A Perspective Of Difference Sequence Pattern

The family business is an important part of China’s private economy, and almost all of family businesses want to be “wealthy over three generations”. Therefore, studies on the performance of family business have always been a hot topic. Currently, although more and more family enterprises have been public, founding family still controls these enterprises. And the battle for power within the family is common, so some scholars start to focus on the study about internal power conflict among family members. Moreover, many family businesses face the problem of management right transmission regarded as one of the most important strategic questions, which leads to more complicated conflict of interests, so it is necessary to study the power allocation within family members. In addition, an increasing number of scholars conduct thoroughly the localization research on family businesses. They believe that Chinese social structure which is identified as difference sequence pattern deeply influences the development of family firms. Therefore, in order to promote sustainable development of the family firm, this study attempts to establish the relationship between power allocation of family members and financial performance from the perspective of difference sequence pattern in the family listed corporation by the way of the case investigation and empirical research.Based on the theory of difference sequence pattern and agency, and according to the domestic and foreign literature on power allocation in family enterprises, we identify the research dimensions about power allocation, financial performance and difference sequence pattern. Then, we take Zhejiang Longcheng Group as an example, analyze the power allocation of founding family and financial performance, and explore the role of the pattern of difference sequence. On this basis, this paper put forward research hypothesis, with 89 main board listed family enterprises’ data from 2012 to 2014 as samples, study the influence of power concentration and deviation among family members on the management performance and tobin Q, and explore the regulation function of genetic relationship and patriarchal authority which is believed as two dimensions of difference sequence pattern.The results show that ownership concentration has a positive effect on financial performance, administrative power concentration and financial performance have significantly positive correlation, and power deviation and financial performance have significantly negative correlation. On this basis, genetic relationship can reconcile the conflicts resulted by administrative power concentration and power deviation, and patriarchal authority is able to strengthen the positive correlation between power concentration and financial performance. These provide some theoretical guidance and inspiration for power allocation of family listed companies during the period of inheritance.