Family Business Intergenerational Succession, Trans-generational Transformation Entrepreneurship And Operating Performance-based On The Moderating Effect Of Successors' Social Capital

ince the Chinese Reform and Opening up, family businesses with characteristics ofhigh growth and rapid decision-making, have rapidly developed into the important pillar of Chinese national economy. In recent years, more and more Chinese family firms have completed or will complete the succession process; therefore the intergenerational transmission of family business has become an essential issue on the way to sustainable development, which cannot be avoided. Based on this, to explore the relationship between intergenerational successions and operating performance of family businesses, and to help family businesses understand the impacts of intergenerational transmission, so that they can smoothly get through the intergenerational succession period, will be of great theoretical significance and application value.Based on the mediating effect of intergenerational transformation entrepreneurship and the moderating effect of heirs' social capital, this study analyzes the relationship between intergenerational transmission and business performance. According to the principal- agent theory and the social emotional wealth theory, this paper constructs the analytical framework of "intergenerational succession- intergenerational transformation entrepreneurship / heirs' social capital- business performance". On the basis of theoretical analysis, this study uses 181 listed family businesses as the research object and the data of these firms from 2004 to 2015 as samples. First, this paper uses the causal step test method to construct a recursive model to test the direct impact of intergenerational inheritance on business performance and the intermediary role of intergenerational transition. Secondly, this article uses interaction term adjustment effects test methods to test the moderating role of heirs' social capital between the intergenerational succession and operating performance. Then replacing operating performance measurement methods and Bootstrap mediating effect test methods are used to test the stability of the regression results. The results show that: the succession of family firms will lead to the decrease of the firms' operating performance, and the intergenerational transformation entrepreneurship is the mediator between them. Therefore, family businesses should treat trans-generational entrepreneurship activities carefully and balance the relationship between innovation and risk. Plus, the more social capital the heirs have, theweaker the negative effects from the intergenerational transmission to business performance will be. So family firms should pay attention to the succession of social capital inheritance, so as to alleviate the negative impact that intergenerational succession has on business performance.The main innovation points of this paper are:(1) based on fully consideration of the hysteresis effects of the influence intergenerational succession has on firm performance, this study uses the panel data of the previous year and the three years after family businesses succession, therefore it can supplement empirical evidence and can accurately measure the impact which succession has on operating performance;(2) this paper validates the intermediary role of intergeneration transformation entrepreneurship played between family businesses succession and performance, and confirms the impact of entrepreneurial activities has on the performance, which are for the sustainable development of family businesses.Therefore, this study reasonably explains the reason why the operating performance declines during the succession process;(3) in view of the influence of implicit factors on the intergenerational succession of family firms, this study explores the moderating role of heirs' social capital in the operating performance through a quantitative approach. This paper is helpful for the family business to comprehensively understand the influence factor of intergenerational transmission of family business enriches the related theory of family business succession and provides theoretical direction for the family businesses to prepare for the intergeneration succession.