The Effect of Work History on Family Firm Owners’ Preference for Introducing External Shares

Family firm owners who were once employed by publicly owned companies are likely left with the imprint of the public economy. This study argues that this imprint is an essential factor influencing family firm owners’ attitude toward external equity, leading to lower foreign shares. Using a fixed-effect panel dataset from China, we found that family firm owners with public economy career experience tend to avoid foreign equity infusion. Furthermore, this relationship is more pronounced for firms that receive more government subsidies and diminishes with higher family ownership. We propose that family firm owners’ early career experience affects their attitude toward foreign equity and suggest that historical factors impact owners’ preference regarding external equity.