Impact of founder controls on digital transformation: evidence from listed family firms in China

Purpose Digital transformation is the key for family firms to gain a competitive advantage in the digital economy. This paper empirically examines the effect of founder control on family firms’ digital transformation from the perspectives of risk-taking and founders’ power. Design/methodology/approach This paper uses an unbalanced panel dataset to test the hypotheses using a sample of Chinese A-share listed family firms from 2010 to 2022. Findings Compared to non-founder-controlled firms, founder-controlled family firms are more capable of driving digital transformation and only facilitate substantive transformation rather than symbolic transformation. Mechanism analysis reveals that founder control is associated with a higher inclination for risk-taking and higher power, which leads to a greater willingness and ability to facilitate digital transformation. Heterogeneity analysis indicates that founder control is particularly advantageous for promoting substantive digital transformation in family firms without state capital participation, second-generation involvement and weak Confucian cultural embeddedness. Originality/value To study how family control affects digital transformation, this article splits family enterprises into founder and non-founder control. This study divides digital transformation into substantive and symbolic paths, each with distinctive objectives. This study improves the understanding of family enterprise digital transformation processes and provides policy insights for their digital evolution.