Economics at your fingertips  

Transforming the management and governance of private family firms: The role of venture capital

Thomas Chemmanur, Gang Hu, Chaopeng Wu, Shinong Wu and Zehao Yan

Journal of Corporate Finance, 2021, vol. 66, issue C

Abstract: We analyze the role of venture capitalists (VCs) in transforming the management and governance of China's private family firms. We show, causally, that VC-backed family firms are more likely than non-VC backed family firms to experience departures of family members from top management positions and decreases in the separation between family control rights and cash-flow rights; these effects are stronger when VCs have greater equity ownership or board representation. We show that these changes in top management and governance in family firms are associated with higher IPO firm valuations and better post-IPO long run stock returns.

Keywords: Private family firms; Corporate governance; Venture capital; Top management changes (search for similar items in EconPapers)
JEL-codes: G24 G34 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.jcorpfin.2020.101828

Access Statistics for this article

Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter

More articles in Journal of Corporate Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2023-05-30
Handle: RePEc:eee:corfin:v:66:y:2021:i:c:s0929119920302728