The Influence Of CEO Successor On Business Performance In A Family Firm

With the forty years reform and opening up of China and rapid development of social economy,family business has experienced decades of development as an important part of economy in China.It has faced the departure and handover of CEOs in family business in recent years.On the question,it is an important issue to choose a reliable family member to take over,or to choose a professional manager to take over.How to choose a more advantageous future for the company is a problem that every family enterprise needs to think about.Many foreign literature studies have shown that the introduction of professional manager has a better effect in promoting enterprises development.But in China,the situation is different,cultural and economic development makes some differences.This paper will analyze the data of Chinese listed family companies and study how to choose is more better for enterprises.This paper takes the data of family business published by CSMAR in 2008-2016 as a sample to learn the family business CEO successor type how to influence the performance of family enterprises,and divides family business CEO successor into family members and professional managers.The family business performance is expressed by the company's ROE.The virtual variable famceo is used.The family business CEO successor type is a family member when famceo is 1,otherwise it is a professional manager.Due to the reverse causal relationship between the family business CEO successor type and corporate performance,there may be endogenous problems caused by the family business CEO successor type and the disturbance item.This paper uses the number of children of the actual controller as a instrumental variable to solve the endogenous problem of the model.Common sense is that the number of children of the actual controller is exogenous,because the human beings cannot directly change the number of children.The results of this paper shows that family members,as the successors of the family business CEO,have a significant role in promoting corporate performance.Family enterprises are more inclined to choose family members to serve as CEO successors.In addition,this article takes the Qinling-Huaihe boundary as the boundary,and divides the family business into the South and the North.By grouping the enterprises to compare the family business performance with the family business CEO successor type.The paper results show that the family business in the south is more effective in promoting the performance of the enterprise.