Chinese Family Business Research Articles

Roots and Rewards: Exploring the Symbiotic Relationship between Familism and Chinese Family Business Philanthropy

This study examines the profound influence of familism on the philanthropic behaviours of family businesses (FBs) in China, utilising data from A-share listed FBs from 2012 to 2020. Familism, a core cultural ethos in China, not only shapes family dynamics but significantly impacts broader socio-economic activities, including corporate philanthropy. Our findings reveal that the intensity of familism within FBs correlates positively with their philanthropic donations. This relationship suggests that FBs embed familial values deeply within their corporate strategies, thus enhancing their social reputation and contributing to societal welfare. Importantly, this study enriches the literature in the field of culture and corporate finance by illustrating how familism transcends internal business practices to influence community-oriented activities, broadening the understanding of how cultural values shape corporate philanthropy globally.

Exploring Key Elements for Achieving Intergenerational Family Business Succession in the Chinese Context

In the rapidly evolving Chinese economy, family-owned businesses, integral to the nation's GDP and innovation, face a significant challenge with an impending wave of intergenerational succession. With over 5.5 million such businesses, less than 20% have identified successors, and only 6% have established succession plans. This study examines intergenerational succession in these businesses, applying Handler's (1989) satisfaction and effectiveness framework, alongside Pyromalis et al. (2006)'s model. The research, conducted through interviews with second-generation owners, aims to uncover factors influencing succession satisfaction and effectiveness. Key findings highlight the unique impact of Chinese cultural values on the succession process. Unlike expectations, the reluctance of incumbents to relinquish control isn't a source of frustration for successors, reflecting the cultural emphasis on respect and deference to elders. The study broadens its scope beyond family dynamics to stakeholder relationships, acknowledging their importance in succession. This research merges theoretical and empirical analyses, adapting a Greek-tested model to the Chinese context, thus enhancing its global relevance. It provides insights into Chinese family business succession, shaped by cultural norms, and demonstrates the versatility of Western models in diverse cultural landscapes, enriching the understanding of global family business succession.

Cheong Yoke Choy (1873–1958): A Grandson Looks Back

Colleagues and friends remember Professor Cheong Kee Cheok as an eminently qualified and respected economist, who served first at the University of Malaya and later at the World Bank. Few were aware, however, that he came from a very wealthy and prominent family. His grandfather, Cheong Yoke Choy, was a pioneering and highly successful tin miner and banker in early twentieth-century Kuala Lumpur. However, Professor Cheong rarely talked about his grandfather. It was only a few years before Professor Cheong passed away that he decided to write about the senior Cheong. Part of the reason for eventually working on the biography was because Professor Cheong had, by then, become interested in Chinese family business and had researched and published on several Chinese business groups. He was able, therefore, to see his grandfather within the framework of early Chinese entrepreneurs and the values they held. Equally important, he had family records, as well as access to the memories of surviving family members.

Long-term Impact of Chinese Family Businesses on Earnings Management under the Sustainable Business Concept

This study aims to delve into the long-term impact of Chinese family businesses on earnings management under the framework of sustainable business practices. Considering the significant role of family businesses in the global economy, this paper focuses on the criticality of their earnings management strategies to economic stability. Employing an in-depth case study methodology, the paper analyzes several successful family businesses to explore the practical implications of sustainable business models on earnings management. The research reveals that integrating the concept of sustainable business into corporate culture and orienting towards long-term development can balance short-term gains with long-term sustainability, thereby fostering the robust growth of the enterprise. The conclusions of this paper emphasize the need for family businesses to concentrate on collective efforts in areas such as social responsibility, innovation upgrading, transparency, and effective communication to achieve long-term and stable development. This study provides practical guidelines for sustainable business strategies tailored for Chinese family businesses, aiming to create more favorable conditions and establish a solid foundation for future long-term development.

Origin matters: Privatization of state‐owned enterprises and family business internationalization

AbstractThe impact of a firm's origins on its strategic decision‐making has attracted scholarly attention in recent years. Focusing on firms' origins, this paper explores the relationship between the privatization of state‐owned enterprises (SOEs) and family business internationalization. Based on data from listed family businesses in China from 2003 to 2022, we find that compared to entrepreneurial family businesses, restructured family businesses have a lower internationalization degree. Moreover, high trade policy uncertainty strengthens the negative relationship between the privatization of SOEs and family business internationalization, while high family involvement plays a weakening role. Several robustness tests later, the findings remain valid. This study introduces the firm's origin as a vital determinant, which may contribute to the prior studies on family business internationalization. Besides, this paper complements research on the economic consequences of the privatization of SOEs in China. Finally, this paper may help Chinese family businesses actively participate in the international cycle to achieve competitive advantage and high‐quality development.

Sustainable Development of Chinese Family Businesses: Exploring the Role of Succession Planning in Maintaining Organizational Sustainability from the Perspective of Socioemotional Wealth

Identifying the factors affecting organizational sustainability is a crucial topic in the field of social science and business research. Especially in family businesses, the most crucial issue is how to maintain corporate sustainability across generations. In this regard, succession planning plays a key role in maintaining the sustainable development of family businesses. From the perspective of socioemotional wealth, this study discusses the motivations and consequences of intrafamily succession by measuring the impact of the internal determining factors of succession planning on family business performance. Based on a sample of 281 Chinese family firms, this study uncovers the relationship between succession planning and organizational performance. The core findings of this study include succession planning is positively related to organizational performance in the matter of the successor’s training; succession planning has a positive effect on organizational performance in terms of the successor’s self-preparation; and succession planning is positively correlated with organizational performance in the aspect of the relationship between the successor and business. By illustrating that the formulation of succession planning is an essential pursuit for family businesses to preserve sustainability and socioemotional wealth, the results reveal ways to facilitate succession planning through internal factors in the family business. This study contributes to organizational sustainable development literature, family business sustainability studies, and succession management research by validating the positive relationship between succession planning and organizational performance, indicating that succession planning is a vital driving force for achieving organizational sustainability.

Legitimacy coupling of enterprise organizations and authority of professional managers in Chinese family businesses

Legitimacy coupling of enterprise organizations and authority of professional managers in Chinese family businesses

A Thematic Review on Successor Development in Chinese Family Business

A Thematic Review on Successor Development in Chinese Family Business

Family business succession and corporate ESG behavior

This study explores the impact of family business succession on corporate ESG behavior, focusing on how decision-making changes during inter-generational transitions. It specifically assesses the influence of second-generation participation in family-owned enterprises on their ESG practices. The findings reveal a more pronounced effect in firms with high marketization and overseas exposure. This research underscores the intertwined nature of inter-generational succession and strategic decision-making in Chinese family businesses, highlighting the importance of studying ESG behavior to understand these dynamics.

The apple doesn't fall far from the tree: Parenting styles and its effects on family business succession intentions

This research integrates the parenting style literature and the Theory of Planned Behaviour to investigate the influence of authoritarian and authoritative parenting styles on the succession intentions of next-generation family members. Through a survey of 179 next-generation family members in Chinese family businesses, our research shows that authoritative parenting positively influences succession intentions sequentially through subjective norms of family business succession and perceived behavioural control or attitude toward family business succession. In contrast, sequential mediation relationships are not supported for authoritarian parenting. Follow-up twenty-one interviews not only confirm our survey results but also provide further explanations for the unsupported relationships between authoritarian parenting and succession intentions.

“Spousal cogovernance” and enterprise innovation: an empirical study based on China’s listed family businesses

ABSTRACT Family businesses significantly influence the private economy and economic growth. Achieving sustainable development and innovation-driven national strategies necessitates fostering innovation in family businesses. Innovation enables businesses to prosper, mitigate market risks, and facilitate intergenerational succession. In contemporary Chinese family businesses, actual controllers, particularly spouses, play a crucial role in management and strategy formulation, which influences corporate innovation through synergistic effects and enhanced decision-making efficiency. This study investigates the impact of spousal cogovernance on family business innovation by analysing data from A-share listed Chinese family businesses from 2009 to 2020. The findings indicate that spousal cogovernance enhances innovation by promoting harmonious relationships and strong inheritance intentions. However, the number of actual controllers and Confucian culture may adversely affect the promotion of innovation. Moreover, agency costs serve as a mediating factor in driving innovation, and minimizing these costs could enhance innovation. In conclusion, this research expands the knowledge of family governance and innovation and illuminates the differences resulting from internal structural changes in Chinese family businesses. We underscore the significance of nurturing innovation and development in spousal cogoverned family enterprises.

Investment in innovation and international entrepreneurial performances of Chinese family businesses: from the perspective of intergenerational succession

ABSTRACT Innovation and international entrepreneurship are important paths for family businesses to achieve sustainable growth. However, there are few relevant studies on the development and inheritance of family businesses. This paper has taken China’s listed family businesses from 2007 to 2020 as a sample in order to explore how investment in innovation affects international entrepreneurial performances. The study found that family businesses with high investments in innovation had lower international entrepreneurial performances. When family businesses are inherited by the firstborn or managed by multiple generations, the degree of this negative impact will increase, while heirs with overseas work experience will reduce the negative impact. The gender and overseas educational experience of the heirs will not have an impact on the negative relationship. These findings emphasize the heterogeneous role of intergenerational succession, revise some traditional inheritance views of Chinese family businesses and reveal the important role of reasonable intergenerational succession strategies in coordinating innovation and international entrepreneurship.

An Exploratory Study of Family Employees in Taiwanese Owned Chinese Family Businesses

An Exploratory Study of Family Employees in Taiwanese Owned Chinese Family Businesses

The impact of ESG performance on debt financing costs: Evidence from Chinese family business

In China, family business is an important part of private economy. This paper studies the impact of China's family business's ESG performance on debt financing costs. We find that: ESG performance of family business can obtain the support of creditors and reduce the cost of debt financing; The performance of family enterprises in social dimension and corporate governance dimension can reduce the debt financing cost of enterprises; ESG performance can significantly reduce the debt financing cost of family business when the family business is in the owner management stage, the children's cultivation and development stage, and the power transfer stage.

From China to fostering rooting innovation in Nanyang: three generations of Malaysian Chinese family businesses in food manufacturing

The purpose of this study is to explore how Chinese family businesses (CFBs) in Malaysia can last three generations through the development of a tacit knowledge innovation by adapting to local markets from traditional food production (Southern China) to fostering rooting innovations in Nanyang (Southeast Asia-Malaysia). The author created this study by using stage model theory of development to compare the evolutionary development of the founding generation to the next generation in three public listed CFBs of food production in Malaysia. The research on business history assessments were obtained from Malaysia’s companies commission house (CCM), annual reports and in-depth interviews. This process is further aided by effectively utilizing tacit knowledge and by introducing new evolutionary CFBs model in food production, a research method has not employed in Malaysia. The findings of this study show that the role of tacit knowledge and innovation is a dynamic process including knowledge creation, evolution, transfer and application, and is also a learning process to sustain the CFBs of food production in Malaysia. These can have an imperceptible influence on and lead to improvements in CFB’s thinking structure, creating added value, self-realization and a competitive advantage in the food industry.

Research on the impact of executive background characteristics on executive compensation gap—Empirical evidence from Chinese family businesses

Based on the data of family enterprises in Shanghai and Shenzhen stock markets from 2008 to 2020, this paper explores the impact of executive background characteristics on executive pay gap. The results show that the older the average age of the top management team, the smaller the executive compensation gap of listed companies; The greater the proportion of female executives and executives with financial background, the greater the executive pay gap in the listed company. After the endogenous problem control of two-stage instrumental variable method, the research conclusion of this paper is still valid. This paper aims to provide new empirical evidence for the salary governance of family enterprises, alleviate the widespread intergenerational inheritance problems and promote the high-quality development of family enterprises.

Literature review on generational inheritance model and applications for Chinese family businesses.

At present, Chinese family businesses have ushered in the peak period of generational inheritance, so the issue of family business inheritance has become more and more important. The generational inheritance of family businesses is not something that can be accomplished in a short period of time, but requires a long process. There are many influencing factors, and how to choose an effective inheritance model for family businesses has always been the focus of academic circles and practitioners. At present, there is no unified conclusion about the choice of family business generational inheritance model and the factors that affect the model choice. By sorting out a large number of domestic and foreign literature, this paper summarizes the predecessors' perspectives on the inheritance model, discusses various driving factors that may affect the current inheritance model. By further analyzes the current influencing factors on the inheritance model, this paper discusses that inheritance intention of successor may be a research perspective that has not been valued, thus proposing an expandable direction in the field of family business inheritance research.

Fostering Business Growth through Generational Change: Is Guanxi Still Important?

Abstract Malaysian Chinese family businesses have been dynamic in adapting to economic and political changes, given the challenges where policies have favored larger local ethnic groups. This study aims to explore the importance of Malaysian guanxi in nurturing business growth, while investigating the intra-ethnic and inter-ethnic business networks that are tapped by Malaysian Chinese family businesses through generational change. As this study investigates the history of Malaysian Chinese business, it is only apt that the case study method is utilized to identify the role of guanxi in business growth. Data for this study was collected through in-depth interviews with the successors of eight family businesses. Secondary data were collected in two folds for data triangulation. Findings suggest that Malaysian guanxi is crucial especially when the owners intend to grow the business as generations change. Of the eight cases, six cases presented the importance of Malaysian guanxi in business growth through generational change. Although there were two cases suggesting that guanxi could be insignificant in the long run, it is not denied that the cultivation of guanxi by the predecessor remains important to this day. The value of this study is seen in the importance of passing down guanxi through succession while fostering a wider inter-ethnic business network to achieve business growth.

Exploring Knowledge-Hiding Methods and Reasons in a Small Chinese Family Business

In the highly competitive business environment, family businesses represent the backbone of the economy in various countries; meanwhile, they face tremendous survival challenges. Knowledge, particularly tacit knowledge, is the key to organisational survival because the hard-to-imitate characteristics could create value and technology innovation. However, it is challenging for family businesses to obtain tacit knowledge because it resides in people’s minds; and compared with sharing, people prefer hiding it for self-protection. In recent years, knowledge hiding has increasingly attracted scholars' and practitioners' attention but few in the family business context. Hence, this research aims to investigate how and why the employees hide tacit knowledge in the small family business. The present study used the Self-determination theory (SDT) as the theoretical foundation to explain knowledge hiding behaviours from the motivational perspective. The single case study was conducted in China, as Chinese family business has distinctive cultural characteristics influencing knowledge hiding. Data were collected and analysed from 22 participants in a small Research and Development company through semi-structured interviews and thematic analysis. The findings revealed that skilled employees used various methods to hide knowledge, such as pretending not to know, using no time as an excuse, and hiding the core knowledge. The reasons for knowledge hiding primarily reflected the unfair issues between the family and non-family employees in terms of the favouritism of the owner-manager toward the family employees, no bonus and ‘996’ timetable (people need to work from 9:00 am to 9:00 pm and 6 days per week) for the non-family members. Theoretically, this study contributes to understanding knowledge hiding behaviours by analysing motivations within SDT and corporate contextual influences in the small family business. These findings facilitate enhancing the owner-manager's awareness of the effects of unfairness on knowledge hiding and providing practical solutions to the unfairness and knowledge hiding among employees, as this has immense implications in any business.

Intergenerational succession mode and selection mechanism of female successors in Chinese family businesses

This study explains the modes of intergenerational succession by female successors in Chinese family businesses and the selection mechanism. In view of the family businesses to which females (daughters) belong, this paper proposes five types of intergenerational succession modes of family businesses, namely the kindred-based succession by the daughter, kindred-based succession by others, joint succession by the daughter and her siblings, joint succession by the daughter and her husband (son-in-law), and succession by a professional manager. By means of case analysis, this study also explores the driving forces for choosing a proper model from the above five succession modes, including family structure, the father’s and business owner’s attitudes, and the daughter’s attitude toward succession, etc. This paper contributes to the domain of the intergenerational succession mode by ‘female (daughter) successors’ in Chinese family-owned businesses theoretically and practically.