Degree Name

Doctor of Philosophy


School of Accounting, Economics and Finance


This thesis focuses on the implications of family control for corporate governance in the Chinese markets. This research is mainly motivated by the following factors. First, although family-controlled firms represent the predominant form of businesses in both developed and developing economies, it was not until the 1980's that family businesses emerged as a field of academic study (Casillas and Acedo, 2007). Despite a "collective sense that significant progress has been made" (Litz, Pearson, and Litchfield, 2012) in family business research, whether family control is beneficial for all shareholders, however, largely remains an open question (Morck, Wolfenzon, and Yeung, 2005; Lins, Volpin, and Wagner, 2013).

Second, prior studies commonly assume that controlling families are a homogeneous group of blockholders and existing literature provides little evidence on what are the core factors that really matter for examining the different impact of family ownership/control on agency problems in family firms. Although some studies find that the impact of family ownership depends on whether the founder is actively managing the firm (e.g., Anderson, Mansi, and Reeb, 2003; Villalonga and Amit, 2006), it can be argued that whether the founder or a descendant is the CEO does not fundamentally change the controlling family’s incentives when dealing with minority shareholders and/or debtholders. Thus, more evidence is needed to reveal other firm-level factors that affect controlling family’s impact on agency problems.

Third, it has been a commonly held view that privately controlled firms, of which a significant proportion is family-controlled firms, have become an important drive of China's economic growth (Allen, Qian, and Qian, 2005). However, academic research of family firms in China has been lagging not only behind family firm research in developed economies, but also far behind the fast growth of family firms (Wei, Lin, Wu, and Li, 2013). For example, Cheng (2014) finds that only three studies that exclusively focus on Chinese family firms have been published in major international accounting and finance journals.