The antecedents and outcomes of business strategies within privately-held family and non-family SMEs in China

Abstract

This chapter focuses upon the strategies of privately-owned, small and medium-sized enterprises (SMEs) in China. As is the case for many countries around the world, a large percentage of Chinese SMEs are family firms, constituting an indispensable component of the national economy and undergirding the country’s economic growth. The recent Chinese Family Business Survey conducted by Forbes (2013), for instance, revealed that 711 of the 2470 companies (28.8 percent) listed in the ‘A share’ equity market of mainland China for that year were family owned. As noted by Kwan, Lau, and Au (2012), the proportion of privately-held businesses in this emerging-market context that are family firms is estimated to be even higher. While Sharma and Carney (2012) have noted that privately-held family firms are under-studied, in general, this is especially so in the case of China. Moreover, although questions such as whether and how family and non-family SMEs differ in terms of their strategic choices have been proposed but not yet carefully examined (Berrone, Cruz, and Gómez-Mejía, 2012), this is particularly so for countries outside of Europe and North America. There is thus a need for family business researchers to bridge the gap in our understanding of the differences between family and non-family SMEs in such contexts—and to examine how any differences affect firm performance. We note that empirical examination of such questions from the socio-emotional wealth (SEW) perspective, in particular, is desired (Berrone et al., 2012).