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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Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - Political connection and business transformation in family firms
T2 - evidence from China
AU - Wang, Delu
AU - Ma, Gang
AU - Song, Xuefeng
AU - Liu, Yun
N1 - 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
PY - 2016/6
Y1 - 2016/6
N2 - 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.
AB - 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.
KW - Business transformation
KW - Transformation mode
KW - Family firm
KW - Political connection
KW - Ownership
U2 - 10.1016/j.jfbs.2016.05.001
DO - 10.1016/j.jfbs.2016.05.001
M3 - Journal article
VL - 7
SP - 117
EP - 130
JO - Journal of Family Business Strategy
JF - Journal of Family Business Strategy
SN - 1877-8585
IS - 2
ER -