Family CEOs: Do they benefit firm performance in China?

摘要

Family firms throughout the world commonly appoint family members as CEOs. However, the value of family CEOs is a subject of ongoing debate. This study attempts to further illuminate the debate in two ways. First, we extend this debate to China, a new and underexplored context, where family businesses are relatively new but growing rapidly. Second, drawing on both principal-agent (PA) and principal-principal (PP) perspectives of agency theory and the institution-based view, we argue that family CEOs are overall, of positive value in China where formal institutions are weak, but this positive effect varies in relative strength across family firms that have different concentrated-ownership structures. Using a sample of 913 firm-year observations for 351 Chinese listed family companies from 2004 to 2007, we find that family CEOs, as a whole, are positively related to firm performance, as measured by both market-based and accounting-based performance, reflecting Tobin's Q and ROA. Further analyses reveal a stronger positive effect in family firms when family owners have higher ownership, when family ownership and family control are less divergent, and when the firms have multiple-large-shareholder structures.