How family control affects the sustainable development of enterprises: An analysis of the actual controllers' characteristics

Wentao Gu and Wanting Mo

International Review of Financial Analysis, 2025, vol. 103, issue C

Abstract: Studying sustainable performance based on environmental, social, and corporate governance dimensions is essential for family firms to improve their competitiveness and address emerging challenges. This study uses data from China-listed family businesses from 2015 to 2021 to explore the effects of the controller's ownership and kinship characteristics on the sustainable development of family businesses. The empirical findings indicate that ownership negatively affects the sustainable development of family businesses, whereas kinship between controllers and founders promotes green sustainability. Furthermore, kinship enhances sustainable development by increasing extended socio-emotional wealth (ESEW). When family control is behind the scenes, ownership reduces ESEW, thus decreasing firm sustainability. Additionally, overseas study backgrounds and second-generation involvement strengthen the positive impact of kinship on sustainable development, while second-generation involvement positively moderates the negative impact of ownership on sustainability. The main results remain robust through endogeneity and robustness tests. This study also provides recommendations for family businesses to facilitate their sustainable development.

Keywords: Family business; Sustainable development; Ownership; Kinship (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:103:y:2025:i:c:s1057521925003254

DOI: 10.1016/j.irfa.2025.104238

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