Intergenerational Succession,Successor Authority And Firm Value

Since the implement of the Reform and Opening up Policy,China's private enterprises gradually become an important driving force of economic and social development within these 30 years,wherein the family firms account for more than 85%(according to the report of China's family firms' succession,2015).Nowadays,the older generation of entrepreneurs gradually reaches the retirement age,the problem of intergenerational succession has become a great challenge to them.Recently,scholars have shown that there is a phenomenon of value evaporation in the process of intergenerational succession of family firm.Therefore,from the perspective of intergenerational succession,this paper analyzes the relationship between the authority which is one of heritage elements,and its dimensions and the value of firm.On the one hand,it is to make the related research of family business more abundant.On the other hand,it is to provide relevant references for intergenerational succession for entrepreneurs.Firstly,this paper reviews the documents of family business and summarizes the definition of family business as well as the elements and the process of intergenerational succession in detail;Secondly,this paper clearly points out the key elements of the intergenerational succession,in other words,it is the succession authority system and its classification and sources;Thirdly,this paper makes an analysis on the relationship between the various dimensions of successor authority and firm's value and puts forward the research hypothesis.According to the definition of family public companies and the intergenerational succession,the paper has chosen 81 family firms listed on Shanghai and shenzhen A-shares market as samples using panel data of 2006-2015.According to the results of empirical analysis,this paper draws the following conclusions:first,in the early phase of the intergenerational succession process,successors' legitimacy authority shall have negative effects on firm's value,As the successors mastering and controlling the firms,the legitimacy authority began to play a significant role in promoting enterprises' value.Second,in the procedure of intergenerational succession,successors' charisma can effectively improve firms'value.Third,as for the successors' family authority,it turns out that relatively distant family members and the core family members has the potential to promote the value of firms indeed.