The Effect Of Enterprise Internal Characteristics On Financing Structure Of Family Business Among Different Life Stages

Family business timeless,widely exist in the world.Since the reform and opening up they have grown rapidly in the land of China,and become one of China's most dynamic enterprise organization form.The characteristics of high two-control-in-one and low agency costs in family business make them grow fast,which laid the foundations for China's economic and social development.Firstly,based on the financing determinants theory,the life cycle theory and the SEW theory,a theoretical analysis of the financing structure under different circumstances is made in this paper.On the basis,the test model of the enterprise internal characteristics affecting the equity financing and debt financing is constructed,then the difference of the effect among different life cycle is compared.,and the moderating effect of family control and external governance environment is considered.Thirdly,the empirical analysis that takes the Chinese A-share listed family business from 2005 to 2014 as a sample is carried out to verify whether the hypotheses are established.Finally,according to the research of this paper,the relevant results and proposals of macro and micro level were got.This study found that: The higher the financial risk,the more the equity financing and the less the debt financing of the family business;the stronger the growth ability,the less the equity financing and the more the debt financing of the family business.Differences in the effect of financing risk on equity financing among family business of different life cycles are found: the effect is highest in maturity stage,seconded by growth stage,however,opposite in decline stage.Differences in the effect of financing risk on debt financing among family business of different life cycles are found: the effect is highest in growth stage,seconded by decline stage,and lowest in growth stage.Differences in the effect of growth ability on equity financing among family business of different life cycles are found: the effect is highest in maturity stage,seconded by growth stage,and insignificant in decline stage.Differences in the effect of growth ability on debt financing among family business of different life cycles are found: the positive effect is insignificant in maturity and decline stage,and the effect is insignificant in growth.Family control shows a moderating role in the effect of internal characteristics on equity financing: the effect is more significant in high family control business and it acts differently among different life cycles.Family control shows no moderating role in the effect of internal characteristics on debt financing except for certain life cycles.External governance environment shows a moderating role in the effect of internal characteristics on equity financing: the effect is more significant in high family business in good external governance environment and it acts differently among different life cycles.External governance environment shows no moderating role in the effect of internal characteristics on debt financing except for certain life cycles.This study shows that family business owners will make different financing decisions in different life cycles,which explains the phenomenon that the previous conclusions of the relevant research are not uniform or even contradictory.In this paper,family control is included in the scope of research,and the analysis combined with the characteristics of life cycle from the perspective of SEW is carried out,which extends and refines the SEW theory.The effect of external governance environment is also included,and differences in the effect on financing structure among different life cycles are compared,expanding the relevant research about external governance environment.The results will provide useful empirical evidence for financing decisions of Chinese family business in different life cycle and capital market construction.