Transgenerational Intentions and the Emergence of Family Firms: Evidence from China’s One-Child Policy Reform

Are family firms born or made? We argue that firms become family-oriented as transgenerational intentions gain salience and reshape owners’ mindsets. Leveraging China’s one-child policy reform as an exogenous shock to within-family succession feasibility, we conduct a difference-in-differences analysis of 2,837 listed firms. We find that, relative to nonfamily firms, firms for which family succession is feasible increase R&D intensity following the reform, with the effect driven primarily by lone-founder firms. Our findings identify conditions under which founder-led firms transition toward family-oriented behavior, providing new insight into the “ made ” side of the born-or-made debate in family business research.