Market Reaction of Succession of Chinese Listed Family Firms

Abstract

After one generation of entrepreneurship, Chinese family firms will gradually usher in the peak of intergenerational succession, and the success of intergenerational succession will also determine the rise and fall of family firms. The principal-agent chain of family firms is short and the cost is small, which can effectively avoid the principal-agent problem. With the gradual improvement of the governance of family firms, whether the family development model,"Being success for no more than three generations", be effectively improved? In this paper, We select Chinese listed family firms in A-share market as research samples to test the market reaction of the intergenerational succession by using the event research method. The empirical results show that the second-generation succession of family firms can often obtain excess returns.