Family Management and Corporate Performance: the Moderating Effects of Firm Size and Concentration of Family Ownership

Abstract

Abstract:

Based on the sample data of the listed family firms from 2010 to 2012 in China, this paper empirically studies the relationship of family management and corporate performance among different types of family firms. We examine the effect of family management on firm performance in different types of family firms. The results show that firm size and concentration of ownership reduces the relationship between family CEOs and corporate performance respectively. We find that family CEOs will outperform in smaller firms with more concentrated ownership and underperform in larger firms with more concentrated ownership. Therefore, when a family firm becomes larger and more concentrated, professional managers should be introduced. We conclude that a family firm should establish and improve an effective governance mechanism as it grows and standardizes.

Key words: family management, concentration of family ownership, agency theory, stewardship theory

Fan Libo, Liu Yunfen, Yang Jinhai. Family Management and Corporate Performance: the Moderating Effects of Firm Size and Concentration of Family Ownership[J]. , 2016, 28(5): 96-106.

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