Research On The Impact Of Two-generation Coexistence Governance On Corporate Performanc

Under the intergenerational inheritance mode of the family enterprises in China,“Cogovernance by two generations” is an unique phenomenon that cannot be avoid.However,few studies have paid attention to this phenomenon and its underlying effects.Zhejiang Longsheng is a representative family enterprise in China,and it is also a typical family enterprise that adopts the inheritance mode of “inheriting from his father”.Based on the existing literature and case enterprises,this paper finds that the two successors of Zhejiang Longsheng(Ruan Weixing and Ruan Weixiang)have similarities and differences in terms of management experience,entrepreneurial spirit and succession intention,and the implementation of enterprise policies are also different.The mode of “inheriting from his father” adopted by Zhejiang Longsheng also has many problems,such as inappropriate selection of heirs,competition caused by different ability of offspring of family with multiple children and unclear intention of founder inheritance.Meanwhile,this paper divides the inheritance mode of Zhejiang Longsheng into three stages,namely,before inheritance(inperson teaching stage),during inheritance(decentralization stage),after inheritance(curtain listening stage).Based on the above stages,this paper takes the inheritance mode of Zhejiang Longsheng as an example to analyze the impact of Co-governance by two generations on enterprise performance.Firstly,based on the event study method,this paper takes the date of Ruan Weixiang’s succession as the general manager(November 19,2004)and the date of Ruan Weixiang’s succession as the chairman(April 28,2007)as the key turning points of the enterprise and discusses its market reaction.The findings are follows: in the in-person teaching stage(Ruan Shuilong and Ruan Weixing)and the decentralization stage(Ruan Shuilong,Ruan Weixing and Ruan Weixiang)of Zhejiang Longsheng,the handover of the family business and the succession competition among the second-generation inheritants will both lead to a certain negative impact on the performance,stock price and the market reaction of the enterprise.When it came to the stage of curtain listening(Ruan Weixiang),with the control gradually being grasped,the second-generation heirs could play their own advantages,the doubts of the market were gradually eliminated,and the enterprise performance was significantly improved.Secondly,based on the Du Pont analysis system,this paper uses the performance indicator processing method,is combined with the inheritance point performance indicator and industry performance indicator trend line to conduct an overall analysis.The research findings are as follows:(1)With development of the three-stage of Co-governance by two generations,the enterprise performance of Zhejiang Longsheng has been improved on the whole.(2)The profitability of Zhejiang Longsheng has been improved under the Co-governance by two generations.With the continuous development of the three stages,the improvement of ROA is due to the Co-governance by two generations,which improves the net interest rate,but does not improve the asset turnover ability of Zhejiang Longsheng.(3)A comprehensive analysis of the three stage of Zhejiang Longsheng shows that its performance under the Co-governance by two generations is better than the industry average level of enterprises.Finally,the non-financial performance of Zhejiang Longsheng(innovation ability,charitable donation and market share)shows a three-stage increasing trend with the development of Co-governance by two generationsThe study of family inheritance about Zhejiang Longsheng in this paper highlights the role of the “Co-governance by two generations” in the intergenerational inheritance,which has certain reference significance for the inheritance of family enterprises.The research significance of this paper lies in the analysis of the influence of intergenerational inheritance of family enterprises on corporate performance in the process of the “Co-governance by two generations” of Zhejiang Longsheng,which provides certain reference value for family enterprises to select inheritance mode,select and train successors,arrange the transfer of power reasonably and inherit the family business smoothly.