Does intergeneration succession influence stock prices of family businesses?

Kunlun Zou, Rong Wu and Pu Chen

Applied Economics Letters, 2020, vol. 27, issue 8, 667-672

Abstract: China’s A-shares family listed companies are facing a period of high intergenerational succession. This has attracted the attention and research of many scholars. The existing studies mainly focus on the motives, methods, and influencing factors of family business’ intergenerational succession, and there are few studies involving the reaction of the capital markets. This article takes 45 listed family businesses as samples and uses the synthetic control method to examine the impact and the degree of influence that intergenerational succession has on stock price movements. Thereafter, a difference-in-differences estimation is conducted to test for robustness. At the conclusion of our research, we find that intergenerational succession has a significant negative effect on the stock price of listed companies.

Date: 2020
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DOI: 10.1080/13504851.2019.1644424

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