"Family Exit" And Performance Of Family Business

Family business is a special form of business where the family is embedded,which plays an important role in China's national economy.Since the reform and opening up in 1978,the Chinese government has issued a series of policies to encourage,support and guide the development of the private economy.Family enterprises have developed rapidly in this golden age with their unique advantages.By 2017,the proportion of family enterprises in the private enterprises listed on the A-share market reached 55.7%.The importance of family enterprises in China's economy can be seen.However,it is undeniable that many family businesses have a duration less than ten years,indicating some unavoidable defects within that hinders the long-term development of the family businesses.In order to achieve the long-term development of family business because of its great economic importance,"family exit" has become a research hotspot of many scholars.The existing literature mostly focuses on the influencing factors of corporate performance or corporate value,and few scholars have explored the way and path of "family exit".Through literature review,this paper finds that "family exit" is mainly carried out from family executives and family holding perspective.Therefore,this paper measures the level of "family exit" in two ways,namely,the degree of participation of family executives and the degree of change of controlling power of holding family,to study the impact on the performance and the influence path in different ways.Based on the principal-agent theory,housekeeper theory and altruism,this paper analyzes the influence of "family exit" on performance,and puts forward the main research hypotheses.Then taking the listed family enterprises from 2007 to 2018 as the research object,through the establishment of fixed effect model to carry out empirical research,to verify the hypothesis of this paper.In addition,this paper further analyzes the transmission path of two ways of "family exit" that affect performance from the perspective of related transactions and over-investment.According to the empirical results,the conclusions of this paper are as follows:(1)the choice of "family exit" in mature enterprises is conducive to the improvement of corporate value.(2)The way that reduces family executive involvement does not affect the performance through related transactions,but only through over-investment.Moreover,there is a three-year lag in the time of the influence of this way on over-investment.(3)The way that reduces the controlling power of the controlling family can influence the performance in both perspective.This way can not only restrain the tunneling and related transactions of the controlling shareholder,but also effectively restrain the over-investment within the enterprise,leading to increased performance.Compared with low executive participation,this way is more time-efficient and there is no time lag.Finally,based on the conclusion of the study,this paper puts forward corresponding policy recommendations from the perspective of family business and government.