How do family firms balance economic and non-economic goals: From symbiosis to competition

Wei Zhang^1*Bingde Wu²Ling Chen³Jian-an Zhu⁴Shihui Chen⁵

• ¹Zhejiang University of Science and Technology, Hangzhou, China
• ²Fuzhou University, Fuzhou, Fujian Province, China
• ³Zhejiang University, Hangzhou, Zhejiang Province, China
• ⁴Hangzhou City University, Hangzhou, Zhejiang Province, China
• ⁵Ningbo University, Ningbo, Zhejiang Province, China

The coexistence of economic and non-economic goals is a distinctive feature of family firms. However, does the pursuit of non-economic goals necessarily mean sacrificing economic goals? This study leverages data from Chinese listed family firms spanning 2009 to 2019 to explore the interplay between non-economic and economic goals. Specifically, we examine family management as a measure for non-economic goals and firm performance as economic goals. Considering the context of Chinese culture, our study adopts a willingness-ability perspective to investigate the symbiotic or competitive relationship between these goals and the moderating effects of firm age and firm size. The empirical results show that family management has an inverted Ushaped relationship with firm performance. Additionally, firm age and firm size moderate this curve. As firm age increases and firm size expands, the inverted U-shaped curve flattens, and the turning point shifts to the right. This study provides new insights into socioemotional wealth perspective and clarifies misconceptions about the goal pursuit of family firms.