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Family firms performance under competitive pressure: Evidence from market access reforms in China

Author

Listed:
  • Liu, Yuanyuan
  • Zhang, Jingwen
  • Bi, Qingmiao
  • Onochie, Joseph

Abstract

This study investigates how heightened market competition, induced by the staggered implementation of China's Market Access Negative List Reform, influences the performance and strategic behavior of family firms. Using a panel dataset of Chinese listed companies from 2012 to 2018, we find that: (1) family firms experienced a significant profitability decline of approximately 1.3 percentage points relative to non-family firms after the policy shock; (2) family firms with longer generational succession and more family members in management were associated with greater vulnerability when facing increased competition; and (3) these effects seem to be persistent, and family firms show indications of strategic responses that emphasize retrenchment and inward governance consolidation, while their relative disadvantage may further constrain their ability of family firms to pursue green and sustainable development goals. Our results indicate that external market-oriented reforms may coincide with heightened salience of internal governance vulnerabilities, potentially posing challenges to the resilience of family-owned enterprises in a rapidly evolving institutional environment.

Suggested Citation

  • Liu, Yuanyuan & Zhang, Jingwen & Bi, Qingmiao & Onochie, Joseph, 2026. "Family firms performance under competitive pressure: Evidence from market access reforms in China," Pacific-Basin Finance Journal, Elsevier, vol. 96(C).
    • Handle: RePEc:eee:pacfin:v:96:y:2026:i:c:s0927538x25003476
    DOI: 10.1016/j.pacfin.2025.103010
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    Keywords

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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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