Family Firm, Corporate Governance and Performance: Evidence from

Abstract: This article try to combine the culture and efficiency arguments of explanation of family firm in the way, that the cultural argument help us to understand family firm as it is and the efficiency argument explains its change in the process of evolution. With a short description of development of family firm in Mainland China after 1978, we investigate the relationship between family firm, corporate governance and performance by researching into over 300 firms in manufacturing industry in Zhejiang Province, China. We examine the stake of the largest family shareholder, the leadership structure and the characters of management impact on family firm performance. We find that family firm perform better than Non-family firm through estimating production function model. Among family firms, nepotism is negatively correlated with the productivity of the firms, while the first in command’s education level have an insignificant effect on productivity improvement. There is no significant relationship between CEO duality and family firm performance