The Allocation of Family Guanxi-Oriented Control Rights —Evidence from Family Listed Companies of Zhejiang China

Abstract

Different from the market-oriented control mechanism in British and American, the guanxi-oriented control mechanism is a significant feature in Chinese family business. This paper proposes the concept of family guanxi- oriented control rights allocation for the first time. Based on the analysis about the influencing factors of the family guanxi-oriented control rights allocation, we use the sample companies coming from Zhejiang province of China to do further discussion. We find that 1) the actual controllers of Zhejiang family listed companies mainly have blood relationship; 2) parts of companies allocate the control rights between the family members who have more than three kinds of guanxi; 3) the controlling families prefer to control the board of the listed companies; 4) the intergenerational succession of control rights in Zhejiang family listed companies has been highlighted.