Family succession and business diversification: Evidence from China

Weng, Tzu-Ching; Chi, Hsin‐Yi

doi:10.1016/j.pacfin.2018.09.001

Cited by 23 publications

(13 citation statements)

References 88 publications

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“…Family succession refers to the process in which the founder of a company transfers the ownership and management of the company to his family heirs. Generally speaking, there are two forms of family inheritance: one is the transfer of corporate ownership and management rights [14]. The founder of the company needs to clarify the successor and the schedule to ensure that the successor can proceed smoothly.…”

Section: Concepts and Theories Related To Intergenerationalmentioning

confidence: 99%

The Investigation about the Heritage over Generations for the Family Enterprise and Firms Financialization Process

Liu

2022

Advances in Multimedia

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From the reform and opening up to the present, family businesses have become an important pillar of my country’s national economy and the most essential push power to the advancement of the Economy of China. At present, more and more family firms come to the top of the hill on the heritage over generations. Meanwhile, the right of owning the firm has changed from the inventor or creators to the descendant ones and it is a must for them to inherit to the advancement. The intergenerational inheritance of family businesses has also had a certain impact on the global economy. At present, China’s real economy is in a critical period of transformation and upgrading and industrial upgrading. At the same time, the weakening of the real economy. On the contrary, with the increasing popularity and deepening development of the financial industry, a large number of non-financial companies have turned their investment goals to the financial industry to obtain high returns. Of course, the company’s financialization must have its positive side, and naturally, there is also a negative side. There are opportunities for enterprises to obtain high profits, but there are also great investment and management risks. Therefore, before financial investment, we should also fully consider the business risks borne by family enterprises. In addition, because of the particularity of the ownership of family enterprises in China, there are great differences in many aspects compared with other family enterprises and non-family enterprises abroad and internationally. Therefore, there may be some differences in the impact of corporate financialization on them. This study will further study and analyze the internal factors and modes of family business intergenerational inheritance leading to enterprise financialization based on family emotional wealth theory and representative theory, combined with the process of family business intergenerational inheritance and family business financialization. In the theoretical part, it combs the literature, including the definition of intergenerational inheritance, influencing factors, and inheritance content. Through the empirical test of the intermediary effect, this paper analyzes and studies the direct impact and intermediary effect of the proportion of productive investment on the intermediary effect; the role of family business identity (most important for children), re measure explanatory variables, and use PSM, propensity score matching method to test the robustness of regression results.

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Section: Concepts and Theories Related To Intergenerationalmentioning

confidence: 99%

The Investigation about the Heritage over Generations for the Family Enterprise and Firms Financialization Process

Liu

2022

Advances in Multimedia

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“…This study first examines the impact of managerial ability on corporate diversification strategies in hypothesis 1. Following Weng and Chi (2019), this study establishes the following equation:…”

Section: Methodsmentioning

confidence: 99%

Does Managerial Ability Affect Corporate Diversification Strategies and Corporate Diversification Performance? Evidence from the US

Hsu¹

2022

Journal of Applied Finance &Amp; Banking

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This study investigates whether managerial ability affects the degree of corporate diversification. Further, it examines whether the performance effect of diversification depends on managerial ability. Using a sample of US firms from 2013 to 2017, this study finds that managerial ability is negatively correlated with corporate diversification strategies. This study also found that managerial ability positively moderates the relationship between diversification and firm performance. JEL classification numbers: G34, M41. Keywords: Corporate diversification strategies, Managerial ability, Corporate diversification performance.

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“…In recent years, with Chinese family enterprises entering the succession stage gradually, Chinese scholars have been increasingly enriching their research achievements in this field. The achievements have not only covered traditional research topics ( Cai et al, 2019 ; Weng and Chi, 2019 ; Zhang and Luo, 2021 ), but also extended this research field based on the particularity of internal and external conditions faced by Chinese enterprises, such as CSR of intergenerational succession in family enterprises ( Chen, 2018 ), operational strategic capital ( Bin-Feng et al, 2022 ), investment in enterprise innovation ( Xiong et al, 2021 ) and so on. Moreover, mechanisms of more factors are further elucidated, including family board’s excessing control ( Liu et al, 2021 ), heirs’ education experience ( Zhu and Lv, 2019 ), first entrepreneurs’ altruism ( Zhu et al, 2021 ), and intergenerational transmission of political resources ( Yang et al, 2022 ).…”

Section: Literature Review and Research Hypothesismentioning

confidence: 99%

The intergenerational succession and financialization of Chinese family enterprises: Considering the influence of heirs’ growing experience

Wang

et al. 2022

Front. Psychol.

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As a mixed-methods research in economics and psychology, this study aimed to analyze the influence from the intergenerational succession on the financialization level including asset financialization and revenue financialization, and further test the moderating effect of the heirs’ typical growing experience according to The Imprinting Theory, based on the 2009–2020 annual data of listed family enterprises of China. There were two key findings. First, the effect of Chinese family enterprises’ intergenerational succession on asset financialization was positively significant while the effect on revenue financialization was not significant, indicating that the financialization behavior has not brought about effective financial profits. Second, among the heirs’ typical growing experiences, their parents’ entrepreneurial experience during their childhood, oversea study experience, and MBA education experience had the significantly positive moderating effects on the influence from intergeneration succession to asset financialization level of Chinese family enterprises, which was an important internal mechanism for the heirs to promote the financialization process of family enterprises.

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Family succession and business diversification: Evidence from China

Cited by 23 publications

References 88 publications

The Investigation about the Heritage over Generations for the Family Enterprise and Firms Financialization Process

The Investigation about the Heritage over Generations for the Family Enterprise and Firms Financialization Process

Does Managerial Ability Affect Corporate Diversification Strategies and Corporate Diversification Performance? Evidence from the US

The intergenerational succession and financialization of Chinese family enterprises: Considering the influence of heirs’ growing experience

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