Publication Type
Journal Article
Version
acceptedVersion
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
Asian Studies | Entrepreneurial and Small Business Operations
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
Citation
CAO, Jerry X.; CUMMING, Douglas; and WANG, Xiaoming.
One-child policy and family firms in China. (2015). Journal of Corporate Finance. 33, 317-329.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/4977
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.jcorpfin.2015.01.005