Continued Growth and Consolidation of Family Capitalism in Taiwan: a Historical–Institutional Account

Abstract The prevalence of family businesses in Taiwan has been consistently documented by scholars, but why family businesses continue to dominate the market despite the island’s rapid economic development over the past half-century still merits examination. This paper adopts a historical–institutionalist approach to investigate the macro factors that help sustain the continuous expansion of family firms in Taiwan. These macro factors include the political nature of Taiwan’s economic development since its inception and the enduring cultural influence of Chinese familism. Chinese family culture influences the inheritance of businesses and engenders an exclusive kinship-based economic controlling group that comprises prominent business families connected through blood and intermarriage ties. During the 1990s, when abundant business opportunities were created following the adoption of deregulation policies, prominent family businesses that connected each other with marriages and maintained strong political connections gained the most in the game of economic liberalisation.