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Abstract Employing panel data from companies listed on the Shanghai and Shenzhen Stock Exchanges from 2007 to 2021, this study conducts an empirical analysis from the perspectives of agency theory and socioemotional wealth theory. The findings indicate that: compared to non-family firms, family businesses exhibit a weaker tendency towards financialization; financial investments have a more pronounced effect on enhancing the financial performance of family businesses; the main reasons family managers curb excessive financialization are their avoidance of the tendency towards short-sighted behavior and potential losses to socioemotional wealth, coupled with the family businesses’ pursuit of enduring success. After controlling for endogeneity issues and excluding alternative explanations, the aforementioned conclusions remain robust.
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Received: 25 June 2024
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