The Impact of Management Succession on Corporate Social Responsibility of Chinese Family Firms: The Moderating Effects of Managerial Economic Motivations

Abstract

Because the establishment of private enterprises has been allowed by the Chinese government since the 1980s, management successions have occurred in a large number of Chinese family firms in recent years. Grounded in upper echelons theory and considering the generational differences between founders and successors, it is expected that the initiation of a within-family succession will lead to significant changes in firms’ CSR strategies. Applying the difference-in-difference method, the results suggest that family firms having initiated successions have better CSR performance relative to those that have not initiated successions and succession firms prior to the initiation of successions. The paper further finds that not all post-succession family firms demonstrate homogeneity in terms of CSR. The impact of succession on firms’ CSR is more pronounced for succession family firms with debt financing plans and politically connected successors. This paper contributes to the manager-effect literature, family firm CSR research and management succession studies, and it is also useful to policy makers of Chinese government.