Publication Type
PhD Dissertation
Version
publishedVersion
Publication Date
4-2025
Abstract
Family firms, as a vital component of the global economy, dominate China's private sector. However, amid the global digital wave, they face dual challenges of generational transition and digital transformation. The involvement of second-generation successors profoundly influences strategic decision-making and digital transformation in family firms. Yet, existing research lacks a systematic theoretical framework and empirical evidence on the relationship between second-generation involvement and digital transformation in family firms, as well as its underlying mechanisms. The study thus examines the impact of second-generation involvement on digital transformation in family firms and its contingency effects.
Focusing on China's A-share listed family firms, the study adopts a quantitative approach and constructs a theoretical framework based on socioemotional wealth (SEW) theory and upper echelons theory (UET). It comprises two further studies: Study 1 investigates the impact of secondgeneration involvement on the digital transformation level in family firms, while Study 2 analyzes contingency effects underlying the impact, particularly the moderating roles of international background diversity and educational similarity in top management teams (TMTs). The panel data draws from 2017– 2022 publicly available data of these family firms, including annual reports, top management profiles, and digital transformation indicators. Hypotheses are tested using multivariate regression analysis and moderating effect models.
Results show that second-generation involvement has a negative but insignificant main effect on digital transformation and firm performance. This finding challenges prior linear assumptions, suggesting the second-generation involvement's influence mechanism is more complex than a direct impact on firms' digital transformation. Further analysis reveals that international background diversity in TMTs significantly weakens the negative effect of second-generation involvement on the digital transformation level. Similarly, educational similarity in TMTs mitigates the negative effects of secondgeneration involvement on both the digital transformation level and firm performance. Specifically, family firms with TMTs that exhibit high international background diversity or high educational similarity experience less inhibiting effect of second-generation involvement on digital transformation.
The study contributes to theory and practice. Theoretically, it enriches the literature on second-generation governance and digital transformation in family firms by integrating SEW theory and UET. It uncovers the impact of second-generation involvement on digital transformation in family firms, and its contingency effects, particularly the moderating roles of international background diversity and educational similarity in TMTs, expanding the theoretical boundaries of antecedents and mechanisms of digital transformation in family firms. Practically, it offers actionable insights for generational transition and digital transformation. When promoting digital transformation, family firms should optimize TMT structures by incorporating professional managers with international backgrounds and digital expertise to balance family control and innovation efficiency. Additionally, they should develop differentiated digital transformation strategies that align with firm size, industry traits, and resource endowments to maximize the strategic value of secondgeneration involvement. These findings provide critical implications for family firms navigating sustainable development in the digital economy
Keywords
family firms, second-generation involvement, digital transformation, TMT characteristics
Degree Awarded
Doctor of Business Administration (Accounting and Finance)
Discipline
Accounting | Technology and Innovation
Supervisor(s)
CHENG, Qiang
First Page
1
Last Page
118
Publisher
Singapore Management University
City or Country
Singapore
Citation
SHAO, Wenwu.
A study on the impact of second-generation involvement on digital transformation in family firms and its contingency effects. (2025). 1-118.
Available at: https://ink.library.smu.edu.sg/etd_coll/697
Copyright Owner and License
Author
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.