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| Allocation of Control Rights, Institutional Environment and Governance Transition of Family Firms——A Case Study Based on the Control Conflict of GOME Ltd. |
| XU Xi xiong |
| School of Economics&Business Administration,Chongqing University |
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Abstract Based on the control conflict of GOME Electrical Appliances Holding Ltd, this paper analyzes private benefits of control in the transfer of control in family firms, and then builds a model to investigate the effect of investor’s legal protection system and managerial trust & reputation mechanism on managerial private benefits of control and transferring of control. The research indicates that, both the formal constraint from investor’s legal protection system and informal constraint from market reputation exert great influence on managerial private benefits of control. That is to say, with the advancement of investor’s legal protection and professional market, the founding family tends to transfer much more control rights to professional managers, which will improve the governance transition of family firms.
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Received: 27 February 2012
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Corresponding Authors:
XU Xi xiong
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2012, Vol. 1 
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