The Inherited Incentive In Family And The Long-term Behavior Of Enterprise

Family business is one of the most important participants in the modern market economy.At present,nearly half of the domestic listed company are family-firms.Because of the blood relationship between its members,family-firms are different from other types of enterprises.As a result,a large number of literature on the family business has made a lot of research.What cannot be ignored is that family firms are more focused on the long-term orientation of the company.So is there a difference of long-term orientation in different types of family business.Based on the literature review,we find that there are no scholars to study the relationship between different types of family firms and long-term behavior.This paper creatively puts forward the classification according to the blood relationship of actual controller of the family enterprise,which measures the inheritance incentives of different family business.Then we study the relationship between the will of inheritance and the long-term behavior of enterprises.In this paper,the family business is divided into three categories according to the different level of inheritance incentives:The first category is that the actual controller belongs to a single family,such as a single natural person,husband and wife,father and son,etc.,in which the actual control will be passed to the immediate descendants,so having the highest incentive inheritance;The actual controller of second types includes the brothers and sisters,belonging to the families of close relatives;The actual controller of third types includes cousins in law,relatives and friends,belonging to different families which have estranged blood relationship,actual control rights being passed on to offspring of close relationship at least,thus having the least inheriting incentive.Through carding,classification and empirical analysis of 7106 family business sample from 2009 to 2015,we find that there is a significant positive correlation between the blood relationship of actual controller of the family businesses and the long-term orientation of company.The more incentive actual controller can get,the more will the company focus on long-term behavior.In order to verify the previous research conclusion,we will divide all enterprises into three categories:state-owned enterprises,private non-family enterprises,family enterprises.The regression conclusion coincides with former scholars,family enterprises paying more attention to long-term behavior.This paper not only extends the research on the long-term orientation of family business but also gives a new angle of view for the investment of long-term value.