Succession,Corporate Governance Structure Change And Corporate Performance

Since the reform and opening up,with the rapid development of China’s economy,a large number of enterprises and entrepreneurs with world influence have emerged.More than40 years later,the first generation of entrepreneurs gradually retreated behind the scenes,and the second and third generations began to come to the front stage.A large number of facts show that succession often brings changes in corporate governance structure,which in turn has a far-reaching impact on corporate performance.However,what kind of changes in governance structure brought about by succession,what is the impact on corporate performance,and what is its underlying mechanism are all outstanding issues in the industry and academic circles.In addition,some scholars believe that the familybased governance model is a kind of compensation for the imperfect formal systems such as Chinese law and capital market in the early stage of reform and opening up,that is,family-based governance is an effective governance model in the institutional environment at that time.However,in recent years,with the continuous improvement of formal systems such as Chinese law and capital market,whether the governance model based on the family is still efficient,and whether the informal system represented by clan culture still has an impact on corporate governance,this is also a question to be answered by the industry and academic circles.Based on this background,this paper takes Chinese family listed enterprises as the research object to explore the changes of succession and governance structure and their impact on corporate performance.Specifically,it includes three aspects:(1)how does succession affect the change of corporate governance structure or governance model?(2)how does the change of governance structure under succession affect enterprise performance?(3)how does the relationship between succession,governance structure and corporate performance change under different intensity of clan culture?In view of the above research questions,based on succession and principal-agent theory,combined with property right theory and clan culture theory,this paper analyzes the characteristics and connotation of governance structure of family business management,ownership and control,and constructs a theoretical framework of the impact of corporate governance structure changes on corporate performance under the succession of family businesses.The framework mainly includes five aspects of theoretical analysis: the multi-stage process and development characteristics of family business succession;the impact of succession on corporate governance structure change;the impact of succession on corporate performance;the mediating path of governance structure change in the relationship between succession and corporate performance;and the moderating effect of clan culture.Based on the framework and using the sample data of Chinese A-share listed family enterprises from 2008 to 2018,this paper makes an empirical study on the change of management right,ownership and control governance structure.The main results are as follows:(1)At different stages of succession,family businesses show different characteristics in the aspects of intergenerational role,governance structure,business development and conflict.(2)Each succession stage will have a negative impact on enterprise performance,compared with the successor to take over the enterprise,the successor control enterprise has a greater negative impact on enterprise performance.(3)Succession can promote the change of management,ownership and control governance structure of family business.With the deepening of the succession stage,the degree of change in the governance structure will be intensified,that is,compared with the "fatherson co-governance" in which the successor takes over the enterprise,the change in the governance structure in the "dictatorship" stage in which the successor controls the enterprise is greater.(4)The change of governance structure under succession will have a significant impact on corporate performance,but different types of governance structure changes have different effects on corporate performance,such as the change of management power governance structure is conducive to improving enterprise market performance,but it is not conducive to improving corporate financial performance.(5)The impact of succession on corporate performance can be mediated by changes in governance structure,but different types of changes in governance structure and different corporate performance show inconsistent mediating effects.(6)Under the background of different intensity of clan culture,the relationship between “succession-change of corporate governance structure-corporate performance” is different: clan culture negatively moderates the negative relationship between succession and the change of corporate governance structure;clan culture negatively moderates the negative relationship of“successors control business-corporate performance”,but this moderating effect is mainly mediated by the change of governance structure.Generally speaking,the main innovations of this paper include: first,this study constructs the theoretical framework of "succession-changes of corporate governance structure-corporate performance" of family business,and studies the impact of the change of family business governance structure on corporate performance under the background of succession.Second,this study explores the mechanism of the impact of succession on corporate performance from the perspective of succession process and the change of corporate governance structure.This paper defines the connotation of the change of governance structure from three aspects of corporate management,ownership and control,and based on the three-stage process of succession,this paper studies the mediating path of the change of governance structure of management,ownership and control in the “succession-corporate performance” relationship,and explores the differences of the impact of different succession stages and different governance structures on corporate performance.Third,this study embeds the clan culture context into the research framework of “succession-governance structure change-corporate performance” to explore the Moderating effect of clan culture in the relationship of“succession-governance structure change-corporate performance”.In theory,this study enriches the research framework of the impact of succession on corporate performance.In practice,this study has important reference significance for the succession decisionmaking of family business owners,especially for the family business founders who are about to face the succession.