Research On The Influence Of The Chinese Family Business Intergenerational Succession On Corporate Fraud

Chinese family businesses are at the peak of intergenerational inheritance,for a family business in the stage of intergenerational succession,legal and compliant operation is the key to the longevity of the family business.Existing research on the influencing factors of corporate irregularities mainly examines the role of both internal and external aspects of the enterprise.Although the results are rich,in addition to the above corporate governance factors,the type of enterprise also has a significant impact on corporate non-compliance.Compared with non-family businesses,family businesses not only pursue economic interests,but also non-economic interests,that is,social-emotional wealth.The core of social-emotional wealth is the intergenerational succession of family businesses.The existing research on the influencing factors of corporate irregularities has not paid enough attention to the intergenerational succession of family businesses.Therefore,it is of great theoretical and practical significance to explore the intergenerational succession of Chinese family businesses for corporate frauds.The research on the intergenerational succession and corporate irregularities of Chinese family businesses in this study can be summarized into three specific research questions:(1)what is the impact of second-generation involvement on corporate irregularities;(2)the impact of different inheritance methods on corporate irregularities(3)Whether different training modes have a heterogeneous impact on corporate frauds.Based on the fraud triangle theory,cost-benefit theory,social-emotional wealth theory,differential pattern theory and high-level echelon theory,this research puts forward corresponding research hypotheses around the above three research questions,and conducts an empirical test with a sample of Chinese listed family businesses from2003 to 2020,and draw the following conclusions: First,second-generation involvement suppresses corporate irregularities.Strategic change plays an intermediary role between second-generation involvement and corporate frauds.The specific relationship is that second-generation involvement can reduce the level of strategic change and thereby restrain corporate frauds.The size of independent directors,educational background of independent directors and financial background of independent directors promote the negative relationship between second-generation involvement and corporate irregularities.Second,second-generation succession of distantly related families promotes corporate frauds.Strategic change plays an intermediary role between second-generation succession of distant relatives and corporate frauds.The specific relationship is that second-generation succession of distant relatives can promote corporate frauds by improving the level of strategic transformation.The scale of independent directors and the financial background of independent directors will weaken the relationship between the second-generation succession of distant relatives and corporate frauds,but the educational background of independent directors has no effect on the relationship between the two;There is no differential impact of corporate frauds,and the characteristics of independent directors have no impact on the relationship between the two.Third,externally cultivate the second generation of the family to promote corporate frauds.Strategic change plays an intermediary role between the external cultivation of the second generation of the family and corporate frauds,and the specific relationship is that external cultivation of the second generation of the family can promote corporate frauds by improving the level of strategic change.The educational background of independent directors and the financial background of independent directors will weaken the relationship between the second generation of externally cultivated family and corporate frauds,but the scale of independent directors has no effect on the relationship between the two.The innovations of this study are as follows:First,the motivational model of the intergenerational succession of family businesses on corporate frauds is constructed.Existing studies have paid more attention to the impact of corporate governance factors on corporate frauds,ignoring the role of family business intergenerational succession.Based on the "process view" of intergenerational succession,this study focuses on the three basic issues of intergenerational succession of family businesses,"what to pass on","to whom to pass it on" and "how to pass it on".The impact on corporate frauds enriches the research category of the influencing factors of corporate frauds.In addition,this study proposes to explain the heterogeneity within family businesses from the coupled perspective of differential pattern theory and social-emotional wealth theory.Second,it reveals the mediating role of strategic change in the intergenerational succession of family businesses on corporate frauds.Existing studies have paid more attention to the direct impact of intergenerational succession of family businesses on corporate behavior,ignoring the intermediary mechanism.This research reveals the role path of "intergenerational succession of family business-strategic change-corporate frauds",so that managers of family businesses can adjust the way of intergenerational succession of family businesses in a targeted manner,and to balance the relationship between "family" and "business".Third,it expands the research on the contextual factors of family business intergenerational succession on corporate frauds.The characteristics of independent directors are introduced into the research framework,and the moderating effects of independent director size,independent director educational background and independent director financial background on the intergenerational succession of family businesses and corporate frauds are respectively tested,which deepens the intergenerational succession of family businesses and corporate frauds.