An investigation of the role of family ownership, control and management in listed Chinese family firms

This study seeks to shed light on two specific governance issues in family firms: First, do control-enhancing mechanisms, often adopted by the controlling family, hurt firm performance? Second, do family managers outperform professional managers? By analyzing a unique and detailed family-firm data set from China, we find that in founder-led firms family members are more inclined to opt for control-enhancing instruments, which harms firm performance. We also find that family managers in general outperform professional managers, especially when the founder serves as Chairman and Chief Executive Officer (CEO) or remains as Chairman with a relative CEO.