Case Study And Empirical Research On Succession Of Family Business And Corporate Performance In China

This thesis drew on the corresponding conclusion by mainly using case study and empirical research on a series of problems of family business and its company performance in China. First of all, it reviewed the literature about the family business, including the definition, corporate governance and succession. Besides, it focused on the current status of family business in China to provide a benchmark for the following research. Through a case analysis on a typical family business – Family Business A, it was found that there exist agency problem, mistrust, tunneling behavior, competition between successors, short entry period, lack of working experience at the grass-roots level and other issues. In order to help the Family Business A to find practical methods to solve the current problems, empirical analysis(including analysis of hypothesis testing and regression analysis) was used to find the between factors of successor and company performance. The main results were as follows. Funding through IPO provides the Company the opportunity of attracting talents and standardizing the corporate governance, which intends to reduce the chance of tunneling behavior of controlling shareholders. Family business is not able to improve corporate performance through succession. If the second generation has grass-roots work experience before succession, it is able to improve the corporate performance. Other factors such as the length of entry time and competition between successors have no direct impact on the corporate performance.