Title

One-child policy and family firms in China

Publication Type

Journal Article

Publication Date

8-2015

Abstract

Family business plays important roles to fuel economic growth in China. Due to the one-child policy, family firms are increasingly facing human capital constraints for within-family succession. Having only one heir decreases the probability of continuing family management by over 3%, reduces the probability of adult children working in family firms by 14%, and significantly decreases founders' expectations of having young heirs for succession. Having fewer children negatively affects founder's expectation to go public, reduces family firm's reinvestment rate and R&D. Overall, the evidence suggests that the human capital constraints due to the one-child policy impose significant negative impacts on within-family succession. Dynastic management of family firms remains an important challenge for first-generation entrepreneurs in China. (C) 2015 Elsevier B.V. All rights reserved.

Keywords

One-child policy, Family firms, Control, Dynastic management, Succession

Discipline

Business

Research Areas

Finance

Publication

Journal of Corporate Finance

Volume

33

First Page

317

Last Page

329

ISSN

0929-1199

Identifier

10.1016/j.jcorpfin.2015.01.005

Publisher

Elsevier

Additional URL

http://dx.doi.org/10.1016/j.jcorpfin.2015.01.005

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