Asymmetric factional groups in family firms: When is family faultline beneficial to the firm?

We develop the concept of asymmetric factional groups, or those in which involve both a factional group and independent entities. We take top management teams in family businesses as an example to illustrate how asymmetric factional groups might have an impact on firm performance. We extend group faultline model by arguing that asymmetric factional groups possess pre-established faultlines between family members and nonfamily members. We propose that large demographic faultlines in such groups would benefit firm performance, and these benefits are contingent on bifurcation bias showed by the controlling family, and regional development level of intermediate institutions. We test our model using data from Chinese listed family firms. Results provide strong support for our propositions.