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Ownership structure and the use of non-family executives in family-dominated Chinese listed firms: An institutional logics perspective

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Abstract

To investigate the use of non-family versus family executives in family-dominated, publicly listed firms, we consider ownership concentration both at the firm level and within the dominant family. Whereas the appointment of family executives is supported by an institutional logic of family control, the use of non-family, professional executives is guided by a shareholder logic. We suggest that higher levels of ownership held by the dominant family relative to other shareholders propel family owners to adopt the family logic, and higher levels of ownership held by the largest family owner relative to other family members weaken the family logic in favor of the shareholder logic. We test our hypotheses on a sample of 2174 firm-year observations covering 635 family-dominated Chinese entrepreneurial firms listed on the Shenzhen Stock Exchange. Statistical results indicate that ownership by family increases, and ownership concentration in family decreases, the use of non-family CEO and non-family top management team.

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Acknowledgements

We acknowledge partial financial support from the National Natural Science Foundation of China (NSFC-71102056 for Chuang Chen; NSFC-71172056 and NSFC-71572167 for Xiaohui Wu). We also thank Yan Zhang for excellent research assistance.

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  1. Dean Xu, Chuang Chen and Xiaohui Wu contributed equally to this work.

Authors and Affiliations

  1. Department of Management, Monash Business School, Monash University, Level 7, Building N, Caufield Campus, Caulfield East, VIC, 3145, Australia

    Dean Xu

  2. School of Management, Xiamen University, Xiamen, Fujian, China

    Chuang Chen & Xiaohui Wu

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  1. Dean Xu
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Correspondence to Dean Xu.

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Xu, D., Chen, C. & Wu, X. Ownership structure and the use of non-family executives in family-dominated Chinese listed firms: An institutional logics perspective. Asia Pac J Manag 36, 797–820 (2019). https://doi.org/10.1007/s10490-017-9550-z

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