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The financial and operating performance of Chinese family-owned listed firms

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Abstract

Abstract and Key Results

  • While existing studies often use sector-level data to explain the phenomenal growth of the Chinese private sector, this paper complements the literature by using firm-level data to conduct a comparative study of performance between family-owned and state-owned firms in China.

  • Taking a population comprising listed firms for the period 1999–2004, we analyze financial and operating performance with reference to five measures: (1) revenue per employee, (2) revenue per unit of cost, (3) net profit per employee, (4) return on assets, and (5) market-to-book ratio.

  • Having controlled for other firm characteristics, such as size, leverage, firm age, sales volatility, innovation and marketing, institutional environment and industry, our results confirm that family-owned firms achieve significantly better performances than state-owned enterprises. These results support the general consensus that China is increasingly reliant on private companies as an engine for economic growth and an employment hub.

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Authors and Affiliations

  1. China-Europe International Business School, Shanghai, China

    Yuan Ding & Hua Zhang

  2. University of Hong Kong and Chinese Academy of Finance and Development, Central University of Finance and Economics, Beijing, China

    Junxi Zhang

Authors
  1. Yuan Ding
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  2. Hua Zhang
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  3. Junxi Zhang
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Additional information

Two anonymous referees helped us to improve the paper considerably. We thank Thomas Jeanjean, Hervé Stolowy, Véronique Malleret, Nhutuyen Le (the discussant) and workshop participants at HEC School of Management, Paris (January 2005), at the 2nd EIASM Workshop on Family Firm Management Research (Nice, France, June 2006) and at the 2nd Asia-Pacific Corporate Governance Conference (Hong Kong Baptist University, Hong Kong, August 2007) for helpful comments. Yuan Ding and Hua Zhang would like to acknowledge the financial support of the CEIBS Research Foundation. They thank Yvonne Yuan and Yixin Luo for their able research assistance. The authors also thank Ann Gallon for her much appreciated editorial help. Part of the research was conducted when the first author was a member of HEC School of Management, Paris.

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Yuan, D., Hua, Z. & Junxi, Z. The financial and operating performance of Chinese family-owned listed firms. MANAGE. INT. REV. 48, 297–318 (2008). https://doi.org/10.1007/s11575-008-0017-9

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  • DOI: https://doi.org/10.1007/s11575-008-0017-9

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