Liability of Ownership Origin, Corporate Philanthropy, and Desire for Control in Chinese Family Firms

Many family firms trace the origin of their property rights to the privatization of state-owned enterprises, particularly in emerging economies. The benefits of such ownership origins have been amply researched; however, there are also disadvantages. By developing the concept of the liability of ownership origin, we theorize that this liability creates legitimacy challenges for privatized family firms, leading their owners to exhibit a lower desire for both family and transgenerational control compared to de novo family firms. However, corporate philanthropy can mitigate these negative effects. Empirical analyses using a national survey of Chinese family-owned firms support our arguments.