Abstract

This study investigates the influence of regional culture on local family firms from the perspective of son preference. By analyzing a sample of all 604 family firms listed on the China Shenzhen Stock Exchange, this study finds that in areas where son preference is pervasive, local family firms will give priority to introducing sons rather than daughters into the firm, and are more likely to hire a family CEO and hold more control of the firm in order to strengthen family control. Meanwhile, family firms in areas where there is a high preference for sons over daughters are also more inclined to choose close rather than distant relatives, and blood rather than affinity relatives into firms. This study contributes to this research by exploring the influence of local culture on family firms and verifying that family members are not a group with consistent interests; some family members are always given higher priority within the family. In addition, most research assumes that family firms in China are homogeneous; we demonstrate heterogeneity across China within different regions.

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