Abstract: As more and more family firms come to the stage of generation succession, the question regarding the operation performance of family second generation heirs, particularly those female ones, has drawn intense attention from the public. In this context, based on a data set of 3,135 firm-year observations from Chinese family-controlled listed companies during the period of 2007-2018, this study investigates the performance of family second generation heirs from the perspective of gender differences. We find that compared with family firms succeeded by female second-generation heirs, family firms succeeded by male second-generation heirs display significantly higher performance, indicating that male second-generation heirs perform better than female ones. We employ firm-fixed effects model, propensity score matching model and instrumental variable two-stage regression model to tackle the problem of endogeneity, and find that our findings are robust. Furthermore, the influence mechanism analysis reveals that as males have an inborn nature of risk taking in comparison with females, family firms managed by male second-generation heirs tend to be much more risk-taking, thereby helping improve firms' future performance. Moreover, due to the influence of traditional preference for sons over daughters, male second-generation heirs get better succession training than female ones, that is, male second-generation heirs have significantly longer training time in family firms and are more likely to stay locally instead of going overseas for accumulating experience and resources, which would be critical for firm operation. In addition, we find that female second-generation heirs' social role as a good wife and good mother is another factor that hinders them from performing better than male heirs. This study not only enriches the relevant literature on family business inheritance and the gender heterogeneity of management, but also has important implications for the current inheritance practice of Chinese family firms.

Key words: family business, second generation heirs, gender differences, firm performance