Research on interactive effects of family ownership and non-controlling state ownership on corporate performance: complementary or substitutive

CHEN Jianlin1

(1.School of Accounting, Guangdong University of Finance & Economics, Guangzhou,China 510320)

【Abstract】In the context that the development of mixed-ownership enterprises controlled by non-public capital in China is being encouraged, the paper discusses the interactive effects of family ownership and non-controlling state ownership on corporate performance based on the sample of Chinese private listed corporations. The results of the study show that family ownership and non-controlling state ownership have complementary effects on corporate performance. The complementary effects have certain differences in different situations. The sample which is originated from the state-owned enterprises demonstrates that family ownership and non-controlling state ownership have a significant complementary effect; as for the sample which is originated from private enterprises, the complementary effect is insignificant. In regions with a good institutional environment, family ownership and non-controlling state ownership have a significant complementary effect. In regions with a poor institutional environment, the complementary effect is not significant. A further analysis reveals that the strength of family involvement will affect the effect of introducing non-controlling state ownership to family corporations. When the strength is relatively low, the introduction of non-controlling state ownership can improve family corporations’ performance; while when the former is relatively high, the introduction of non-controlling state ownership will reduce family corporations’ performance. A dynamic study shows that when the family ownership ratio increases and the non-controlling state ownership ratio decreases, corporate performance will be improved.

【Keywords】 family ownership; non-controlling state ownership; enterprise performance; complementary effect; substitution effect;


【Funds】 National Natural Science Foundation for Young Scientists of China (71202097) Foundation for Humanities and Social Sciences of the Ministry of Education for Youth Project (12YJC630009) Natural Science Foundation of Guangdong Province (S2012010010844).

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(Translated by ZHANG yan)


    [1]. ① Due to limited space, the empirical results of robustness tests are not reported here. If necessary, please contact the author. [^Back]


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This Article


CN: 11-3536/F

Vol , No. 12, Pages 99-114

December 2015


Article Outline


  • 1 Research background
  • 2 Theoretical analysis
  • 3 Research design
  • 4 Empirical research
  • 5 Further study
  • 6 Conclusions
  • Footnote