IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v198y2025i2d10.1007_s10551-024-05817-6.html
   My bibliography  Save this article

Historical Ownership of Family Firms and Corporate Fraud

Author

Listed:
  • Xin Huang

    (Hunan University of Technology and Business)

  • Wanrong Li

    (Beijing Normal University)

  • Chen Cheng

    (Zhengzhou University)

  • Hao Huang

    (Xi’an Jiaotong-Liverpool University)

  • Guanchun Liu

    (Sun Yat-sen University)

Abstract

We examine the impact of family firms’ historical ownership on corporate fraud. Our results show that restructured family firms from state-owned enterprises are more likely to violate and commit more fraud than entrepreneurial family firms. This finding is robust to the difference-in-difference-in-differences estimation, an instrument variables regression, fixed effects research design, and propensity score matching (PSM) approach analysis. Mechanism analysis shows that restructured family firms result in lower financial performance, high labor redundancy, inefficient investments, and cash volatility. Therefore, restructured family firms have a stronger incentive to conceal these problems through corporate fraud. Furthermore, the effects of family firms’ historical ownership on corporate fraud are weakened for a more extended period after SOE ownership reform and the restructuring approach adopted by equity takeover.

Suggested Citation

  • Xin Huang & Wanrong Li & Chen Cheng & Hao Huang & Guanchun Liu, 2025. "Historical Ownership of Family Firms and Corporate Fraud," Journal of Business Ethics, Springer, vol. 198(2), pages 293-319, May.
    • Handle: RePEc:kap:jbuset:v:198:y:2025:i:2:d:10.1007_s10551-024-05817-6
    DOI: 10.1007/s10551-024-05817-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10551-024-05817-6
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-024-05817-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jbuset:v:198:y:2025:i:2:d:10.1007_s10551-024-05817-6. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.