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  • Political connection and business transformation in family firms evidence from China

    Rights statement: This is the author’s version of a work that was accepted for publication in Journal of Family Business Strategy. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Family Business Strategy, 7, 2, 2016 DOI: 10.1016/j.jfbs.2016.05.001

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Political connection and business transformation in family firms: evidence from China

Research output: Contribution to journalJournal articlepeer-review

Published
  • Delu Wang
  • Gang Ma
  • Xuefeng Song
  • Yun Liu
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<mark>Journal publication date</mark>06/2016
<mark>Journal</mark>Journal of Family Business Strategy
Issue number2
Volume7
Number of pages24
Pages (from-to)117-130
Publication StatusPublished
Early online date4/06/16
<mark>Original language</mark>English

Abstract

We investigate the impact of family ownership on core business transformation and the moderating role of political connections in this relation through a Probit model, conditional Logit model, and Heckman selection model with instrumental variable using data from Chinese listed companies covering 2001–2010. The results demonstrate that, compared with non-family firms, family firms are more likely to transform their core business, enter strongly correlative industries and non-regulated industries, and adopt a mergers and acquisitions (M&A) mode. Furthermore, compared with politically non-connected family firms, family firms with political connections are more likely to conduct business transformation and adopt M&A rather than an internal cultivation mode to realize transformation. In addition, political connections make family firms more likely to enter weakly correlative industries and increase their chances of entering government-regulated industries.

Bibliographic note

This is the author’s version of a work that was accepted for publication in Journal of Family Business Strategy. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Family Business Strategy, 7, 2, 2016 DOI: 10.1016/j.jfbs.2016.05.001