Second-generation involvement and the digitalisation of family firms: evidence from China

This study aims to examine the impact of second-generation involvement on the digitalisation of family firms. Through theoretical and empirical research on Chinese listed family firms, we investigate the complex relationship between second-generation involvement and the digital transformation process. The findings reveal that the involvement of second-generation members hinders digital transformation to a certain extent, with managerial risk preference playing an intermediary role in this relationship. Second-generation involvement has a stronger inhibitory effect on digitalisation in smaller firms and firms within industries with lower levels of competition. Additionally, the moderating role of ownership concentration and institutional investor shareholding on the relationship between second-generation involvement and digital transformation is explored. The results indicate that ownership concentration and institutional investor shareholding can alleviate the negative impact of second-generation involvement on the digitalisation of family firms. This study enriches socioemotional wealth theory by examining the family firm's digitalisation and provides practical guidance to promote their digitalisation.