Intergenerational succession and opportunistic behavior of non-family executives: evidence from China

Numerous studies have been conducted on the economic consequences of intergenerational succession; nonetheless, research on the behavior of non-family executives after this transition has been rarely reported. This study argues that intergenerational succession may have a detrimental effect on non-family executives, leading them to engage in opportunistic behavior. This hypothesis is confirmed using a sample of Chinese listed family firms from 2003 to 2020. Primary findings indicate that non-family executives behave more opportunistically after intergenerational succession. This behavior is mainly driven by feelings of unfairness and career concerns among non-family executives, as identified by mechanism tests. This effect of intergenerational succession on opportunistic behavior among non-family executives may diminish through effective corporate governance or may be amplified through strong Confucian culture, as demonstrated by heterogeneity tests. This study sheds light on the potential adverse effects of intergenerational succession from the perspective of non-family executives and provides practical insights for family business succession.