Do Restructured Family Firms Do Long-Term Investments?

Family business play an important role in Chinas transitional economy.The longterm orientation of family business has an important effect on economic development.Thus,more and more scholars pay attention to the family businesses and begin to discuss the differences between different family firms.However,only little studies notice that family firms have different origin in China.This difference can directly influence the organizational structure and behavioral logic between family firms.If we ignore this difference when we analyse the family firms' behavior,we will neglect many significant problems.Thus,this study analyses the long-term investments of private family business and focuses on the differences in the choices of long-term investments which caused by the psychological ownership of family entrepreneurs in restructured firms.Finally,this study examines moderating effects which affect this relationship.Using a comprehensive dataset of all family listed firms in China between 2008 and 2016,this study shows:(1)The restructured firms engage less in long-term investments because the entrepreneurs have low levels of psychological ownership.(2)Personal characteristics of entrepreneurs have significant moderating effects on the relationship between restructure and long-term investments.Both the time that entrepreneurs enter the restructured firm and the political tie of entrepreneurs can strengthen the level of long-term investments in restructured family businesses.(3)The characteristic of enterprises has significant moderating effects on the relationship between restructure and long-term investments.A growable restructured family businesses may engage more in long-term investments.(4)The institutional environment has significant moderating effects on the relationship between restructure and long-term investments.Institutional fragility will weaken the market long-term investments and strengthen the nonmarket long-term investments.Furthermore,the historical institution-aspiration gap will weaken both the market and nonmarket longterm investments.(5)In the further analysis of the restructured family business,the study found that among the restructured family businesses,the family businesses reformed by the state-owned enterprise have lower investment in market long-term investment than those restructured from non-state-owned enterprise,while have higher investment in nonmarket long-term investment than those restructured from non-stateowned enterprise.