Intergenerational Succession Occurrence and ESG Performance: Evidence from the Chinese Market

This study addresses three key questions about how family ownership influences Environmental, Social, and Governance (ESG) performance in Chinese listed firms (2008–2021). First, we compare ESG outcomes between family and non-family enterprises, showing that family businesses underperform—especially in governance—and thus stand to benefit from targeted improvements. Second, we examine how ESG scores change when first and second generations jointly manage the firm, revealing that intergenerational succession leads to better ESG outcomes. Third, we extend the socioemotional wealth (SEW) theory by demonstrating that second-generation involvement moderates the negative relationship between family ownership and ESG results, highlighting an effort to promote corporate reputation and smooth the transition process. To strengthen causal inference, we implement multiple endogeneity checks, including Propensity Score Matching (PSM), the Instrumental Variable (IV) approach, and the Gaussian Copula (GC) approach. We also conduct cross-sectional analyses to reduce heterogeneity. Collectively, our findings illuminate the interplay among family ownership, SEW factors, and ESG objectives, offering actionable guidance for policymakers and family enterprises managing generational transitions.