| After 30 years of reform and opening up,private economy rise quickly and become an important part of Chinese economy.Family business as a major force of private economy,made an important contribution for China's economic and social development.Family control arrangement which is the core of the governance system arrangement of a family business,have significant impact over family enterprise Capital decision-making and enterprise value.Under the "new normal" economy,family enterprises face many challenges.Family inheritance becomes important issue of the sustainable development of family enterprises.As the founder becomes older,family members enter into management of family firm gradually increased.On the one hand,as the industry expansion,more family members began to hold shares,get in charge of the enterprise.On the other hand,the second generation of family continuously added into family firm,and a growing number of consanguinity and affinity also gradually participate in the family business management and operation process.As cornerstones of family business,relationship appears diversified.The proportion of Single kinship proportion has reduced,but the proportion of father-son(mother-son)relationship is rising,which becomes the most active in all the effects of kinship.Usually the development of family enterprises relies on blood relationship instead of immature business relationship,to complete the primitive accumulation of capital.Family control the family business can bring different economic consequences,and control must have heterogeneity family control must have a significant impact over investment to the enterprise financial and operating decisions.Based on China's listed family companies as samples,this article investigates the relationship between family control heterogeneity and the corporate financial decisions.Family itself is the aggregations of stakeholder which based on blood relationship.Because of the blood relationship between family-members is different,the altruism between family-members is varying,and thus the decision vision has significant differences.At the same time,the agency conflict within the family cannot completely disappear automatically,taking the family as a whole to study the influence of family control could be skewed.Thus while studying family control‘s impact on the family business financial decisions.We think it is necessary to distinguish between different types of family controls.On the basis of the existing literature,according to the genetic relations,family control can be divided into five types:(1)the father-son(or mother-son)control;(2)Composite kinship control(including relatives,in-laws,Cousins)(3)control of husband and wife;(4)brother(sister)control;(5)personal control.At the same time according to the tolerance for risk,the above five types of family control can be divided into two groups which are higher risk tolerance group and lower risk tolerancegroup.Risk aversion group include father-son control and composite control of family business And risk bearing type family business mainly refers to the type of founder control,which contains the spousal control,brothers control and individual control.And we investigate different types of control of family businesses' impact over financial decision-making.Furthermore,to study the development of Chinese family enterprise cannot leave the Chinese special institutional background.In general,family control inherits within the family,usually in the underdeveloped institutional environment;highly concentrated ownership is more common.When we study the influence of family control heterogeneity on corporate financial decisions,it is necessary to consider the institutional environment,where the family businesses operate,may impact on corporate financial decisions.Based on path of the family control heterogeneity,combining with the environment of China's capital market,this paper investigate family control heterogeneity's influence over family enterprise financial decision-making under China's institutional environment.Then the article discussed the function of institutional efficiency plays.The conclusion of this paper can provide important evidence for family enterprises ownership structure and inheritance arrangement.In this paper,the main findings include:1.Different family control types of family businesses would have various financing decision.First of all,we found the relationship between risk aversion type family businesses and bank loan ratio is significantly negative,which indicate that according to the risk aversion theory,for avoiding financial pressure that higher debt costs lead,these family enterprises would have lower bank lending rates.And there is significant positive relationship between risk bearing type of family enterprise and bank loan ratio.This shows that,comparing to the risk aversion type of family businesses,the risk bearing type family businesses have higher loan ratio.Secondly,we exam the moderating effect of institutional efficiency,found developed legal system efficiency can strengthen the relationship between risk averse family enterprise and the bank lending rate.In further research,we will exam the relationship between the five kinds of control type and the bank loan ratio respectively,found that the family enterprise controlled by father-son have lower proportion of bank loan.While Founder-brothers and individual founder,have higher proportion of bank loan.2.Family control heterogeneity has significant influence on enterprise investment decision.The study found that compared with R&D investment,risk aversion type of family businesses tend to invest in physical investment which has stable earnings volatility,and a lower risk.And family enterprises controlled by founder family tend to invest in R&D investment.In addition,we found that the institutional efficiency can strengthen the investment orientation of two kinds of family businesses respectively.Finally,among the five kinds of control types,the result show that the family businesses controlled by father-son prefers physical investment,and family businesseslead by founder-brothers prefer R&D investment.3.Family control heterogeneity has significant influence over cash holdings.According to the theory of risk aversion and defensive motivation theory of cash holdings,we found,in order to prevent operating risk caused by external economic environment uncertainty,risk aversion type family business would hold a higher level of cash.Family enterprises controlled by Founder have higher level of risk tolerance,which tend to have lower level of cash holdings.Moreover,we found that family enterprise controlled by father-son and composite family member prefer to hold a higher level of cash,and the family business lead by founder-brother,individual founder will hold a lower level of cash.In addition,we found a sound institutional efficiency can reduce the risk adverse family enterprise's cash levels.4.The impact of family control heterogeneity over the dividend spending is evident.Study found that risk aversion type family firms have significant positive relationship with dividend payout ratios,indicating that,the altruism of family members and family member in order to meet its own interests,risk aversion type of family enterprises will have a higher level of dividend payment rate.While risk bearing type of family enterprise have significantly negative relationship with dividend payout ratio,which indicates that,comparing to the risk aversion type family firms,risk bearing type family enterprises is more inclined to keep sufficient cash to satisfy the business development of the family enterprise.Secondly,combined with institutional environment,the result show that institutional efficiency can rise family enterprise dividend payout level.Finally,it is found that family businesses controlled by composite family members are more willing to pay higher dividends,and family business lead by founder-spouse and individual founder has a lower level of dividend payment.The contribution of this article is as followings:First of all,most existing literature takes family business as a whole to examine its capital decisions.By looking up the enterprise IPO prospectus,annual financial report and the company's official website,we manual collect the data of blood relationship of actual controller of family businesses.Based on the existing literature,we reclassify family control types respectively,which are father-son control,composite family members control,founder-spouse control,founder-brother control,and founder-individual control.This article enriches the research field of family control.Secondly,based the above analysis of five types of family control,according to family altruism,agency theory,as well as to the risk tolerance ability,we divided five types of family control into two groups,which are risk aversion family business and risk bearing the family business.Risk aversion family businesses including father-son control and composite family member control,while the risk bearing group mainly refers to the founding family enterprise,including founder-spouse,founder-brothers,and founder-individual.Furthermore,from the view of institutional efficiency perspective,respectively to we investigate the various types of family controls' impact on family business finance decision-makings respectively.Results reveal the mechanism of family control heterogeneity under different institutional background.Taken as a whole,the evidence is consistent with the notion that family control heterogeneity can affect the preferences of family firm decision-making.The conclusion of this article can help family businesses realize the defects and advantages of its control power,better solve the problem of family corporate governance and family inheritance,better confirm the direction of enterprise development.to obtain the sustainable development of family business has important theoretical and practical significance.The conclusion of this paper can provide important evidence for family enterprises ownership structure and inheritance arrangement.Finally,the article provides a new experience evident for family business succession,it also enrich the family business research on the problem of succession. |
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