Heterogeneity Of Institutional Investors And CEO Changes In Family Businesses

As an important part of China's listed companies,family businesses occupy a pivotal position in China's economic development.Family member participate in management is one of the important characteristics that distinguish family businesses from non-family businesses.Recent research believes that family member participate in management can significantly reduce agency costs and enhance corporate value.It is an effective internal governance model;on the other hand,it has also been found that altruism and the pursuit of non-economic goals generally exist in family businesses can reduce the governance efficiency and market value of family businesses.With implementation the policy of “supernormal development of institutional investors” at the regulatory level,the position of institutional investors in the capital market has been greatly improved,and it has gradually become an important investment entity,and its role in corporate governance has become increasingly apparent.If the corporate governance mechanism is effective,the likelihood of a company's performance declining and executives undergoing mandatory changes will increase.At this time,how institutional investors as external large shareholders will play a governance role in family companies,and affect the sensitivity between family company CEO changes and company performance is a question worth exploring.This article takes the CEO change as the starting point,and uses 628 Shanghai and Shenzhen A-share listed family companies from 2010 to 2018 as a research sample to explore the sensitivity of institutional investor holdings and heterogeneous institutional investors to family company CEO changes and company performance.At the same time,review related research literatures on family business and family management,institutional investors and their heterogeneity,institutional investors' participation in corporate governance and executive changes,and put forward research hypotheses on this basis.Combined with the empirical analysis results,the following conclusions are drawn: First,the greater the proportion of institutional investors,the more likely the CEO of a family business will change due to a decline in company performance;Second,compared with transactional institutional investors,stable institutional investors have a more obvious role in promoting changes the CEO of family companies due to the decline in company performance;Third,compared with transactional institutional investors,stable institutional investors have a more significant impact on the sensitivity between family CEO changes and company performance.This paper expects to broaden the research perspectives of institutional investors' participation in corporate governance,and to provide a reference for better understanding the institutional mechanisms of institutional investors' corporate governance and the decision-making behavior of family companies.