Family Control, Corporate Governance and Firm Value
|School||Southwestern University of Finance and Economics|
|Keywords||family firm corporate government Informal governance mechanism corporate value|
In the background of economic globalization and the rise of equity doctrine, corporate governance has become an important research subject among the theories of the firm. The core of corporate governance is to realize scientific decision-making and rights balance, so as to improve corporate governance performance and firm-value.Family firm is one of the hot subjects studied by scholars, whose researches show that family-owned and family-controlled firms account for 60 to 80 percents of global enterprises, show stronger vitality and stronger sustainability. In China, since the reform and opening up, especially since the 1990s, the private enterprises has made a great progress, contributing much in accommodating large numbers of employment. This phenomenon makes domestic scholars gradually realize the importance of family-firms, but most of the papers are normative research, lacking empirical researches.Family-firms are much dependent on the family since its emergence, which indirectly lead to the family’s "only one big" position, as well as the coexistence of the formal governance and informal governance.This paper aims to do research on the formal governance and informal governance structure of family-controlled-firms, and its relationship with the firm value. We first analyze the emergence of such firms and its growing way, so as to bring to light its dependence on family, and the development and evolution of the governance mechanism. Secondly, we analyze the three governance mechanisms that most influence the firm-operation, and conclude its impact on firm-value. Thirdly, we collect data in 2007-2009 of the listed-family-firms, to inspection relevant theory and assumptions, so as to reveal the relationship between firm-value and corporate government.