Abstract
Family business is one of the things in the past, also is the existing way, the model of the future. Based on the 1420 private companies listed in China for 7 years (2006-2012), data statistical analysis found that with the increasing of the year, two rights separation degree of private enterprises were falling. As the change of the institutional environment, involved in the enterprise internal members of the family are increasing, and the source is also diversified. Listed on the mainland China for 717 family enterprises 7 years (2006-2012), the data of empirical test showed that the family members involved in the enterprise are advantageous to the family firm social emotional wealth preservation; the relationship of core family and family enterprise social emotional wealth behavior had a direct relationship. The improvement of the external institutional environment also be advantageous to the family enterprise social emotional wealth preservation, and the external environment will also be able to change influence of the family members involved in the enterprise to family enterprise social emotional wealth preservation behavior. The outbreak of the financial crisis eases the contradiction between the members of the family and the common crisis awareness, which shows the relationship between brothers and relatives and friends with the core family relationship (marriage) family members for the preservation of the family enterprise social emotional wealth which make greater contribution than the second direct generation.
Highlights
Since the kick-off of 3rd Plenary Session of 11th Central Committee of the Communist Party of China (CPC) in 1978, along with the “Reform and Opening Up” policy, the potential of marketability of China’s economic system has been more and more obvious, and the potential of private economy has been released as well
Considering that preserving socioemotional wealth is the key motivation of family involvement and that firm governance is closely linked to socioemotional wealth protection, we eventually draw a conclusion that the family involvement has the function to affect firm governance
The impact family involvements imposed on family firm governance mainly focus on family enterprise shareholding ratios from different groups and separation between ownership and control rights
Summary
Since the kick-off of 3rd Plenary Session of 11th Central Committee of the Communist Party of China (CPC) in 1978, along with the “Reform and Opening Up” policy, the potential of marketability of China’s economic system has been more and more obvious, and the potential of private economy has been released as well. The 3rd Plenary Session of 18th CPC Central Committee was held in Nov. 2013, reiterated the importance of market economy in China, and strengthened the confidence of China’s private entrepreneurs. This paper counted the proportion of the actual control-rights and the proportion of the actual ownership based on 7 (2006-2012) years’ data of 1420 private-listed firms in China from the database of China Stock Market Accounting Research (CSMAR).
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