Corporate Governance and Performance in Hong Kong Founded Family Firms: Evidence from the Hang Seng Composite Industry Index
This conference proceeding was originally published as:
Lee, K.,.& Barnes, L. (2016). Corporate governance and performance in Hong Kong founded family firms: Evidence from the Hang Seng Composite Industry index. In A. Wahid, C. Amaro, & W. Murad (Eds.), Proceedings of the Australia-Middle East Conference on Business and Social Sciences. Paper presented at the Australia-Middle East Conference on Business and Social Sciences, City Seasons Hotel, Dubai, 17-18 April (pp. 178-193). Adelaide, Australia: Australian Academy of Business and Social Sciences.
This research investigates the corporate governance and performance between founding family firms and non-founding family firms in Hong Kong, and the performance inside founding family firms under three different management status. By focusing on Hong Kong business, this research seeks to study 75 Hong Kong listed companies in HSCII for 5 years, yielding 347 observations. The empirical result suggests that the founding family firms in Hong Kong may not outperform nonfamily firms, and the founding family firms with founders as CEOs are one of best performers among founding family firms.
Agency costs will be generated by the divergence between CEO interest and those of the outside shareholders if the owner-manager sells equity claims on the corporation. There are two different mainstreams of views regarding relationships between ownership and performance in family business: negative and positive effect generated from family ownership and control. To what extents the two different views are relevant to Hong Kong family firms are still unclear.
This research not only studies the performance behaviours of Hong Kong founding/ non-founding family business and inside founding family business, but also sets a foundation for further research regarding corporate governance and the performance of founding family firms in Hong Kong, especially of Chinese family owned businesses in Mainland China.What’s more, it gives insights for entrepreneurs to manage their businesses and plan the succession of founding family business in Hong Kong.
Barnes, Lisa and Lee, Kim, "Corporate Governance and Performance in Hong Kong Founded Family Firms: Evidence from the Hang Seng Composite Industry Index" (2016). Business Conference Papers. 5.