Transformations  in
Business & Economics

COMPARISON OF FAMILY OWNERSHIP AND NON-FAMILY OWNERSHIP PRIVATE FIRM PERFORMANCE
Liang Tang, Kangyin Lu, Wei Wu

ABSTRACT. As China reopened its stock market, the number of privately-owned companies listed on the stock market has been continuously increasing. Within the privately-owned company category, the number of family owned firms has also been increasing. This paper focuses on the topic of which type of ownership results in better performance, family firm or non-family firm. Using A-share stock market data from 2003 to 2014, we examine the relationship between ownership and firm performance, and consider the impact of the type of family firms and management authority on firm performance. In addition, we built a model to evaluate, the impact of firm size, firm age, firm leverage, growth, and industry factors. Evaluation of the data shows that firm performance of family firms controlled by single natural person, single family, and the whole family are in descending order.
We also find that greater management power can significantly reduce the performance of family performance, but all types of family firms' performance are significantly better than that of non-family firms. The model is found to be robust, and can be used to evaluate company performance.

KEYWORDS: firm ownership, firm performance, China stock market, management power.

JEL classification: M13, G34, G32.