Second-generation’s Background Characteristics,managerial Discretion And Financial Investment Level

As a unique and important component of listed companies in China,family company has been widely concerned.With the arrival of the peak period of Chinese family firms’ intergenerational transmission,family second-generations have begun to involve in companies,participating in the management of companies.The influence of the family’s second-generation members’ participation in company management on the value and strategic decision-making of companies has become a hotspot of scholars’ attention and research.According to research data,starting from 2005,Chinese financial market has been booming,driven by the excess return rate,many non-financial companies have begun to invest financial assets,and the number of financial assets they hold has risen rapidly.During the 2008 financial crisis,this trend was temporarily decline,but then climb again.Under the "financialization" boom,investing in financial assets has also become a new channel for family companies to conduct diversified business or even to launch strategic changes.The growth background and training path of the second-generations different from the previous generations have shaped their differences in terms of values and concepts.Will these differences intensify the financial trend of family companies and affect the companies’ financial investment after the family second-generations involving in family companies management? Will these influences change with the second-generations gradually taking the core management positions? These are questions worth exploring.So,this research attempts to use the family firms which have been involved in the second-generations management as a sample to explore the relationship between the background characteristics of the family’ second-generations involving in management and the level of companies’ financial investment,and the role of second-generations’ managerial discretion in it.This article first reviews and combs the research literature on family company and family company executives,family second-generation and organizational decision-making,family second-generation and managerial discretion,company financial investment and related theories.Then,this article further proposes the related research hypothesis.The empirical analysis is conducted with the 144 listed second-generations involvement family companies in the Shanghai and Shenzhen Stock Exchanges from 2010 to 2017.According to the results of empirical analysis,the article draws the following conclusions: First,the family’s second-generation members with high education,overseas experience,and related-professional background will significantly promote the level of companies’ financial investment.Second,second-generation’s managerial discretion has a significant positive effect on the relationship between the overseas experience of the family’s second-generation and the level of company’s financial investment,and has a positive influence on the relationship between the education level of the second generation of the family,the related-professional background and the level of corporate financial investment,but the influence is not obvious.This article hopes to enrich the research of the family’s second-generation members,and also provide some ideas for the survival,inheritance and development of the family companies that has or has not entered into the intergenerational transmission stage,and the development and implementation of the second-generation training plan.