Unpacking ESG in family firms: the moderating role of institutional investors in China

Purpose This study aims to examine how family control is associated with environmental, social and governance (ESG) performance in Chinese listed family firms (FFs) and whether institutional ownership moderates these associations. By disaggregating ESG, it clarifies where family-control logics align with, or diverge from, market-oriented ownership pressures in an emerging-market context. Design/methodology/approach Drawing on socioemotional wealth and institutional perspectives, the authors analyse panel data from 1,561 Chinese-listed FFs over 2009–2019. They estimate two-stage least squares (2SLS) models with firm and year fixed effects, using general manager family affiliation as a context-specific instrumental variable. Findings Family control is positively associated with environmental and governance performance, but not significantly associated with social performance. Institutional ownership weakens the positive associations between family control and environmental and governance outcomes, consistent with tensions between family-oriented long-term priorities and shorter-horizon market pressures. Results remain broadly consistent in the manufacturing subsample. Research limitations/implications The findings are based on listed Chinese FFs before COVID-19; future research could examine privately held firms and post-2019 ESG regulation. Practical implications The results suggest that family owners and institutional investors should use dimension-specific ESG governance rather than treating ESG as a uniform construct. Social implications Clearer social-performance standards may help reduce symbolic compliance and strengthen substantive ESG engagement in emerging economies. Originality/value The study demonstrates heterogeneous family-control associations across ESG dimensions and shows when institutional investors dampen family-driven environmental and governance engagement. It contributes by integrating socioemotional wealth and institutional perspectives and by using a context-grounded instrumental variable to address endogeneity concerns.

Authors

Institutions

Publication Details

Journal
Journal of Entrepreneurship in Emerging Economies
Published
2026-06-27
DOI
https://doi.org/10.1108/jeee-09-2025-0601
Primary Topic
Family Business Performance and Succession
Type
article
Field-Weighted Citation Impact
0.00
Controls
|||
ALL TIME
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
article

Unpacking ESG in family firms: the moderating role of institutional investors in China

Changyi Zhu, Alexandra Simon, Maria Jose Parada
Journal of Entrepreneurship in Emerging Economies
Family Business Performance and Succession
article

Unpacking ESG in family firms: the moderating role of institutional investors in China

Changyi Zhu, Alexandra Simon, Maria Jose Parada
article en

Abstract

Purpose This study aims to examine how family control is associated with environmental, social and governance (ESG) performance in Chinese listed family firms (FFs) and whether institutional ownership moderates these associations. By disaggregating ESG, it clarifies where family-control logics align with, or diverge from, market-oriented ownership pressures in an emerging-market context. Design/methodology/approach Drawing on socioemotional wealth and institutional perspectives, the authors analyse panel data from 1,561 Chinese-listed FFs over 2009–2019. They estimate two-stage least squares (2SLS) models with firm and year fixed effects, using general manager family affiliation as a context-specific instrumental variable. Findings Family control is positively associated with environmental and governance performance, but not significantly associated with social performance. Institutional ownership weakens the positive associations between family control and environmental and governance outcomes, consistent with tensions between family-oriented long-term priorities and shorter-horizon market pressures. Results remain broadly consistent in the manufacturing subsample. Research limitations/implications The findings are based on listed Chinese FFs before COVID-19; future research could examine privately held firms and post-2019 ESG regulation. Practical implications The results suggest that family owners and institutional investors should use dimension-specific ESG governance rather than treating ESG as a uniform construct. Social implications Clearer social-performance standards may help reduce symbolic compliance and strengthen substantive ESG engagement in emerging economies. Originality/value The study demonstrates heterogeneous family-control associations across ESG dimensions and shows when institutional investors dampen family-driven environmental and governance engagement. It contributes by integrating socioemotional wealth and institutional perspectives and by using a context-grounded instrumental variable to address endogeneity concerns.

Journal of Entrepreneurship in Emerging EconomiesVol. 18(7)
Universitat Autònoma de Barcelona (ES), Universitat Ramon Llull (ES)
Openalex Percentile: Top 3%
Family Business Performance and Succession
AI Navigator

Ask Laika to Summarize, Analyze, and Connect papers live on the map.

Summarize Papers & Methodologies

Extract key findings, datasets, and comparative methods across publications.

Benchmark Rankings & Visual Analytics

Rank top research institutions, authors, funders, topics, and journals by Field-Weighted Citation Impact (FWCI) and paper volume with instant charts.

Connect Distant Disciplines

Bridge topological clusters on the map to find hidden collaborative intersections.