Intergenerational Succession?Family Power And Intergenerational Succession Crisis

Since the reform and opening,Chinese private enterprises have developed rapidly and have made important contributions to the development of national economy.After 30 years of development,most of the family enterprises have entered a critical period of transition between two generations.At the same time,influenced by the family planning policy,quite a number of family enterprise's entrepreneurs have only one child,which makes the choice of successor be very narrow.At present,under the background of a slow global economic recovery,China's economic growth gradually slow down,the GDP growth rate is 7.3% in 2014,and be 6.9% in 2015.Most of Chinese family enterprises which depend on traditional industries such as manufacturing are facing serious challenges.For the family enterprises which have completed inheritance,the second generation's corporate control will be a challenge.In this special period,both completed and uncompleted inheritance family enterprises are facing challenges.The succession crisis problems of the intergenerational succession begin to emerge gradually.Under the above background,this paper will study the correlation between family power(Ultimate control rights and cash flow rights of controlling families)and intergenerational succession crisis,combined with the analysis of the different relationships in different succession periods.And it has theoretical significance and practical value to provide support for better intergenerational succession.The content of this paper includes several parts.The first part is introduction,including the research background,the theoretical significance and the practical significance,the basic content of research,the research frame and the innovative points of this research.The second part is the definition of concepts and literature review.Firstly,we determine and sort the conceptions of family enterprises?family enterprises' intergenerational succession and family enterprises' intergenerational succession crisis.Then we summarize the present situation and problems of the family enterprises' intergenerational succession in China tolay the foundation of the next analysis.The third part of this paper is the theoretical analysis and hypothesizing.At first,we use agency theory to deduce ultimate control right and cash flow right of controlling families on the impact of family enterprises' intergenerational succesion crisis.Then,we use authoritative theory?social identity theory and upper echelons theory to analyze the correlation between family power and intergenerational succession crisis in different succession periods.Based on the theoretical analysis above,we suggest hypothesises.The fourth part of this paper is the design for the empirical research,including the selection of data,the definition of the variables and the construction of the mathematical model.The fifth part of this paper is the analysis of the empirical results,including descriptive statistics,correlation analysis,and multiple regression analysis and the robustness test.The last part of this paper is the conclusion and suggestion including conclusions from this research,the suggestions on relevant policy,the limitations of relative research and the direction of future research.Through the empirical research on the data of A-share listed family firms from year 2002 to 2015,this paper makes the following conclusions.There is a negative correlation relationship between family power and intergenerational succession crisis.When the controlling family has stronger ultimate control rights and cash flow rights,the financial health level of family firms' intergenerational succession will be higher and the probability of intergeneration succession crisis will be smaller.In the period of "Involvement" and "Co-management",family power has a certain inhibitory effect on intergenerational succession crisis.However,in the period of "Takeover",there is no significant relationship between both.The innovation points of this paper focuse on the following aspects.First,this paper searchs the related literature of intergenerational succession and the relevant theory of enterprise crisis.We summarize the different situations about intergenerational succession crisis and give a complete definition of intergenerational succession crisis.This paper enrich the theory of intergenerational succession.Second,we define the financial crisis and the financial distress occured in the process of intergenerational succession as a family business succession crisis.We draw lessons from Z score model proposed by Altman(1968).When the Z index is less than the critical value,we think that intergenerational succession crisis happen.In the paper,we use Z score to measure the degree of intergenerational succession crisis.Third,we can find few research of intergenerational succession.The research we can find often stays in the stage of qualitative research,empirical research is relatively scarce.This paper quantitatively discusse the relationship between the family power and intergenerational succession crisis.And we provide an analytical paradigm on intergenerational succession crisis for the future research.