Abstract
Intergenerational succession is a critical stage that most Chinese family businesses are in or will be in. Therefore, problems like what influence of intergenerational succession will have on performance of family businesses and what their internal action mechanisms and action paths will be like are worthy to be discussed. Taking 1028 sample data of A-share listed family businesses in Shenzhen and Shanghai during 2010 to 2014 as study objects, the essay discussed direct influence of intergenerational succession on performance of family businesses and mediating effect of enterprise innovation on intergenerational succession and performance of family businesses by use of multiple regressions. Research results indicated that there had a negative correlation between intergenerational succession and performance of family businesses, and between intergenerational succession and enterprise innovation, and moreover, part of mediating effect of enterprise innovation on intergenerational succession and performance of family businesses was obvious. It means that intergenerational succession leads to the decline of performance of family businesses, and one of the mechanisms is that intergenerational succession reduces innovation investment of enterprises. The research results could provide a reference to family businesses in arrangement of innovation strategy and management of enterprise performance in the stage of intergenerational succession.
Highlights
Research results indicated that there had a negative correlation between intergenerational succession and performance of family businesses, and between intergenerational succession and enterprise innovation, and part of mediating effect of enterprise innovation on intergenerational succession and performance of family businesses was obvious
It means that intergenerational succession leads to the decline of performance of family businesses, and one of the mechanisms is that intergenerational succession reduces innovation investment of enterprises
Suci,t * Inhei,t is a critical explanatory variable of the research model: Suci,t * Inhei,t = 1 indicates that the enterprise has started its intergenerational succession in that year, in other words, the second generation has entered into the top management team or the board of directors; and Suci,t * Inhei,t = 0 indicates that the family business has not started the intergenerational succession or it is a non-inherited family business
Summary
The survey report of Chinese modern family business in 2015 by Forbes indicated that founders of enterprises were above 65 years old and most family businesses were in or would be in the critical stage of intergenerational succession. Most existing researches discussed direct influence of intergenerational succession on enterprise performance without analyzing action mechanisms and paths during the process. According to shortcomings of the existing researches, the essay would discuss action mechanisms of enterprise innovation investment in relations between the intergenerational succession of family businesses and their performance. Based on the sample data of A-share listed family businesses in Shenzhen and Shanghai, the essay tried to explore the reasons and solutions in view of fluctuations in performance of Chinese family businesses in the stage of succession from the internal perspective of resource input. The research results would have a practical significance in innovation management and promotion of performance in the stage of intergenerational succession
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