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Does intergeneration succession influence stock prices of family businesses?

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  • Kunlun Zou
  • Rong Wu
  • Pu Chen

Abstract

China’s A-shares family listed companies are facing a period of high intergenerational succession. This has attracted the attention and research of many scholars. The existing studies mainly focus on the motives, methods, and influencing factors of family business’ intergenerational succession, and there are few studies involving the reaction of the capital markets. This article takes 45 listed family businesses as samples and uses the synthetic control method to examine the impact and the degree of influence that intergenerational succession has on stock price movements. Thereafter, a difference-in-differences estimation is conducted to test for robustness. At the conclusion of our research, we find that intergenerational succession has a significant negative effect on the stock price of listed companies.

Suggested Citation

  • Kunlun Zou & Rong Wu & Pu Chen, 2020. "Does intergeneration succession influence stock prices of family businesses?," Applied Economics Letters, Taylor & Francis Journals, vol. 27(8), pages 667-672, May.
  • Handle: RePEc:taf:apeclt:v:27:y:2020:i:8:p:667-672
    DOI: 10.1080/13504851.2019.1644424
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    Cited by:

    1. Shuai Song & Lixin Zhou & Stavros Sindakis & Sakshi Aggarwal & Charles Chen, 2024. "The Impact of Intergenerational Succession Intention on Family Firm’s Innovation Strategy: Evidence from China," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 204-237, March.
    2. Ren, Xiaoyi & Liu, Xing, 2024. "Passing the dividend baton: Family succession and cash dividends," International Review of Financial Analysis, Elsevier, vol. 94(C).

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