Family Control, The Internal Ownership Concentration Among Family Members And The Agency Efficiency

Compared with the general private companies, family business’s particularity is its family property. Family control and family sibship are the two deep characteristics of family property. First, the strength of family control is the standard of whether an enterprise is known as the defined as family business. Second, family sibship is the inherent property of the family. The managers will take the family interests to maximize the utilization of enterprise resources because of the existence of family sibship. In the different strength of family control, the managers deputize the enterprise resources with different agency enthusiasm, which affects the efficiency of the agency.The premise of managing the company by taking maximizing the family benefits as the guide is that the managers and other family members can keep unanimous in family interests under the constraints of family sibship. But the conflict among family members is inevitable and the family sibship can only weaken it. Therefore, when considering the effect of family control on the efficiency of the managers, the family internal governance factors shouldn’t be ignored. That is to say the family members will not be always unanimous in family interests and the unanimous degree depends on the difference of family control. For further step, it may result different agency. Equity allocation is an important means of family internal governance. Different equity ownership concentration in family members will bring different governance effect. Therefore, this article is to examine the regulation effect of the equity ownership concentration in the correlation of family control and the agency efficiency from the perspective of equity governance.Through the empirical analysis, this paper draws two main conclusions:first, the agency efficiency increases with the family control enhancing t; second, the regular effect of internal equity allocation is positive between family control and agency efficiency. This shows that strengthening the control of the family and increasing the concentration of the ownership of the family members in the family controlled enterprises is beneficial to enhance the agency efficiency.This research is divided into five parts:the first part is the introduction that elaborates the research background, significance and the innovations of this paper; The second part is literature review that combs the agency efficiency of the family business, family control, internal equity concentration degree research and then gives a brief review of the literature. Moreover, on the basis of theoretical analysis and logical reasoning, this paper puts forward two hypotheses. The third part is the data source and variable selection, the data source, the variables and measurement methods, the model construction are introduced. The fourth part is the empirical analysis process. This paper uses SPSS17.0 software to analyze the collected data. The correlation analysis and regression analysis are done to test the hypothesis. The fifth part is the conclusion of this paper. Based on the theoretical deduction and empirical analysis, relevant suggestions and research prospects are put forwarded.