How does family exit affect family business financialization?

Huxing Li, Yuran Wang and Heng Zhang

Finance Research Letters, 2023, vol. 58, issue PB

Abstract: This paper examines how the family exit of family businesses affects financialization, using family-owned firms in China's stock markets as samples. The study shows that family exit from executive positions to increase the proportion of non-family member executives has a facilitating effect on corporate financialization, and controlling family's reduced shareholding has a dampening effect on corporate financialization; providing equity incentives to executives helps to dampen the facilitating effect of family exit at the managerial level on corporate financialization compared to compensation incentives; and family exit reduces the degree of corporate financialization by increasing the level of corporate financing constraints.

Keywords: Family business; Family exit; Financialization (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323008218

DOI: 10.1016/j.frl.2023.104449

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