The power of technology: corporate internet technologies adoption and family firm succession choice
Youliang Yan, Wei Cao, Lin HuPurpose
This study aims to examine whether and how corporate Internet technologies adoption affects family firm succession choice.
Design/methodology/approach
Based on the data from the nationwide survey of Chinese private firms, the study conducts multiple regressions to examine the relationship between corporate Internet technologies adoption and family firm succession and employs a series of robustness checks, including instrumental variables approach, propensity score matching (PSM) procedure, placebo tests, alternative proxy indicators, alternative research sample and controlling for regional characteristics to mitigate potential endogeneity concerns.
Findings
The results show that corporate Internet technologies adoption is positively associated with family firm succession choice. Mechanism tests reveal that corporate Internet technologies adoption contributes to family firm succession by mitigating succession uncertainty, strengthening risk-coping capabilities and enhancing family wealth creation. Moreover, the effect is more prominent when the second-generation successors hold stronger succession willingness and the entrepreneurs have higher social status, as well as for firms located in regions with more mature marketization and more developed digital infrastructure.
Originality/value
This study contributes to the literature on determinants of succession choice from the perspective of technological empowerment and also provides practical insights into how cutting-edge Internet technologies shapes business behaviors.