Will the "Prosperity of the Population and Son" Affect the Hiring of the "Shopkeeper"?-Research on Succession Decisions of Actual Controllers in Chinese Family Firms.

Abstract

“The prosperity of the population and son, the prosperity of the country” means that the more family members and male offspring, the more stable and prosperous the family foundation of future generations. This concept is deeply engraved in China’s traditional culture, and affects the behavior and decision-making of the actual controller as a parent. Chinese family enterprises are facing urgent problems such as power transfer and leader replacement. Although some studies have paid attention to the relationship between children’s characteristics and enterprise inheritance, they have not connected this relationship with the internal mechanism of successor selection. The existing theoretical research lacks in-depth analysis of the influence mechanism of children’s characteristics on professional manager appointment. Therefore, we attempt to make up for this deficiency. Based on this, we take Chinese family listed companies from 2009 to 2019 as a sample to test the impact of the number and the gender structure of actual controllers’ children on family enterprises’ professional management. The study found that the number of children, especially the number of sons, will inhibit the professional operation of enterprises. This conclusion is still true after the robustness test. Further research found that compared with daughters, sons have a more significant impact on professional management. At the same time, the greater the ownership proportion of the actual controller, the stronger the correlation between children’s characteristics and professional management. We not only studied the influencing factors of enterprise succession from the perspective of children’s characteristics, but also enriched the organization theory in the context of family business, which is helpful to promote the benign evolution and healthy and sustainable development of enterprises.