Advanced Search
MyIDEAS: Login

Family ownership and business expansion of small- and medium-sized Chinese family businesses: The mediating role of financing preference


Author Info

  • Zhang, Xian
  • Venus, Jill
  • Wang, Yong
Registered author(s):


    The relationship between family ownership and business expansion is the subject of controversy among researchers. This article expands on the mediating role of financing preference in the context of family small and medium enterprises (SMEs) in China. In the research programme, the relationship between family ownership and business expansion was empirically examined using data collected from a survey of 206 Chinese family businesses in Henan Province. On one hand, the results show family ownership has a negative effect on a firm's total expansion level and a positive effect on a firm's internal financing preference (ratio of internal to external funds). On the other hand, we found an inverted U-shaped relationship between family ownership and a firm's annual expansion rate. The findings of this research generally indicate a complex relationship between family ownership and family business expansion: (a) Family businesses have a tendency to stagnate; stagnation is therefore a factor in the mediating role of financial preference on business expansion in size. (b) The presence of external equity partners may reduce the limitations of full family ownership; however, selling the majority of the firm is not an effective way to achieve rapid expansion.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Family Business Strategy.

    Volume (Year): 3 (2012)
    Issue (Month): 2 ()
    Pages: 97-105

    as in new window
    Handle: RePEc:eee:fambus:v:3:y:2012:i:2:p:97-105

    Contact details of provider:
    Web page:

    Order Information:

    Related research

    Keywords: Family ownership; Financing preference; Expansion; China;


    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Lopez-Gracia, Jose & Aybar-Arias, Cristina, 2000. " An Empirical Approach to the Financial Behaviour of Small and Medium Sized Companies," Small Business Economics, Springer, vol. 14(1), pages 55-63, February.
    2. Danny Miller & Isabelle Le Breton-Miller & Barry Scholnick, 2008. "Stewardship vs. Stagnation: An Empirical Comparison of Small Family and Non-Family Businesses," Journal of Management Studies, Wiley Blackwell, vol. 45(1), pages 51-78, 01.
    3. Sraer, David & Thesmar, David, 2004. "Performance and Behaviour of Family Firms: Evidence from the French Stock Market," CEPR Discussion Papers 4520, C.E.P.R. Discussion Papers.
    4. Robin Mackie, 2001. "Family Ownership and Business Survival: Kirkcaldy, 1870-1970," Business History, Taylor & Francis Journals, vol. 43(3), pages 1-32.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Fitó, M. Àngels & Moya, Soledad & Orgaz, Neus, 2013. "The debate on rented assets capitalization: The economic impact on family firms," Journal of Family Business Strategy, Elsevier, vol. 4(4), pages 260-269.
    2. Acquaah, Moses, 2013. "Management control systems, business strategy and performance: A comparative analysis of family and non-family businesses in a transition economy in sub-Saharan Africa," Journal of Family Business Strategy, Elsevier, vol. 4(2), pages 131-146.
    3. Landry, Suzanne & Fortin, Anne & Callimaci, Antonello, 2013. "Family firms and the lease decision," Journal of Family Business Strategy, Elsevier, vol. 4(3), pages 176-187.
    4. Goel, Sanjay & Mazzola, Pietro & Phan, Phillip H. & Pieper, Torsten M. & Zachary, Ramona K., 2012. "Strategy, ownership, governance, and socio-psychological perspectives on family businesses from around the world," Journal of Family Business Strategy, Elsevier, vol. 3(2), pages 54-65.


    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


    Access and download statistics


    When requesting a correction, please mention this item's handle: RePEc:eee:fambus:v:3:y:2012:i:2:p:97-105. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.