A Study On The Influence Of Family Governance On Financing Structure

Family business is the oldest and most common form of corporate organization in human history and plays a vital role in the development of the world economy.With the continuous pace of China’s reform and opening up and the continuous improvement of the system,family business development is very fast.Family business not only effectively promotes the development of China’s national economy,but also makes a great contributionfor China’s stable employment.There are more and more researches on family business in academia.However,the existing research results are based on the theory of agency cost and the theory of control and other mainstream financing theory to study the financing structure of family business.Few literatures consider the impact of family business specificity on its financing behavior and financing structure.This paper studies the influence of the special governance mechanism of family governance on the choice of financing structure,and breaks through the governance structure and financing structure of the existing family enterprises,which makes the sustainable development of Chinese family enterprises.This paper takes the non-equilibrium panel data of listed family enterprises in China from 2010 to 2014 as the research samples,firstly,the multivariate regression analysis method is used to analyze the three dimensions of family governance:the influence of family ownership,family control and family management on financing structure.And then further analysis of the three dimensions of the decision of the degree of family governance on the financing structure of the impact.The results are as follows:First,the higher the cash flow right of the family controlling shareholder,the lower the conflict of interest with the minority shareholders,the lower the cost of the enterprise’s use of equity financing,will be more inclined to equity financing.Second,the higher the proportion of family control shareholders,the lower the level of assets and liabilities of enterprises,but when the cash flow and control the separation,the enterprise will be more inclined to debt financing.Third,in order to avoid the risk of bankruptcy and seek personal benefits,family members will exclude external funds,not to allow creditors or other external investors to intervene in the enterprise.Fourth,the higher the degree of family governance,the lower the level of corporate debt,Which will reduce the scale of corporate debt financing Fourth,the higher the degree of family governance,the lower the level of corporate debt.ⅢFinally,based on the empirical test results and related analysis,this paper puts forward relevant policy suggestions from the aspects of optimizing the ownership structure,optimizing the creditor’s rights structure and optimizing the relevant laws and regulations.