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Familial altruism and reputation risk: evidence from China

Hanqing “Chevy” Fang (Missouri University of Science and Technology, Rolla, Missouri, USA)
Yulin Shi (Asper School of Business, University of Manitoba, Winnipeg, Canada)
Zhenyu Wu (Asper School of Business, University of Manitoba, Winnipeg, Canada)

China Finance Review International

ISSN: 2044-1398

Article publication date: 1 April 2021

Issue publication date: 20 October 2021

476

Abstract

Purpose

The authors study the effects of altruism and intention for succession on family firm's reputation risk-taking behaviors in Chinese publicly listed companies.

Design/methodology/approach

The authors use earnings management as a proxy for reputation risk in family firms, and hand-collected relationship between family members to measure the closeness of incumbent family members and their potential successors as a proxy for the altruistic degree.

Findings

Results show that, in developing countries like China, familial altruism in family firms with succession plans, which does not reduce the practice of earnings management, should be considered by practitioners while detecting it.

Originality/value

The hand collected data are very unique; the authors have focused on the relationship between incumbents and successors and the authors define their closeness by using genes shared between them.

Keywords

Citation

Fang, H.“., Shi, Y. and Wu, Z. (2021), "Familial altruism and reputation risk: evidence from China", China Finance Review International, Vol. 11 No. 4, pp. 437-448. https://doi.org/10.1108/CFRI-01-2021-0016

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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