Does family involvement increase business performance? Family-longevity goals’ moderating role in Chinese family firms
Family involvement in management (FIM) attracts much scholarly attention in the field of family business but reveals conflicting performance implications. With the contradictions in mind, this paper raises and answers two research questions. First, how does FIM affect firm performance? Second, is the relationship between FIM and firm performance contingent on a firm's goals? To address these research questions, the study uses 158 family firms in China as a context in which to examine the role of family in business performance given the country's strong familial culture. Results show that while FIM has no direct effect on performance, a firm's family-longevity goals positively moderate the relationship between FIM and performance. Specifically, the relationship between FIM and performance is more positive when a firm's support for family-longevity goals is higher versus lower. The paper concludes with the implications of the results and the suggestions for future research.
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