Succession and family firm performance

This thesis investigates how succession affects family firm performance, using a dataset from the Chinese stock market. I contrast family succession when the successor is a family member with unrelated succession, where the firm is managed by a professional manager after succession. Results show that family firm’s performance is negatively affected after succession in case of family succession as well as unrelated succession. Focusing on family succession, the successor who has not worked in the firm before succession outperform the successor who has already worked in the firm before succession, suggesting that the natural of family tie compensate the lacking of being in the firm before succession. However, no evidence is found that whether change a chairman of the board or a general manager will cause different effects on firm performance.