Zhang Danni

Leveraging the reform of China’s one-child policy and insights from the ‘dark side’ of socioemotional wealth (SEW), this study examines whether family firms are more likely to be involved in securities fraud. The one-child policy reform, which allows families to have more children, may influence the transgenerational succession intentions in family businesses. To ensure the successful succession of a family business to future generations, family owners need to maintain control over the firm. This necessity may drive them to prioritize the family control dimension of SEW over other dimensions, potentially leading to an increase in securities fraud in family firms. Using a difference-in-differences design, our study reveals that, compared with non-family firms, family firms are more likely to be involved in securities fraud in the period following the one-child policy reform. This tendency is particularly pronounced when family firms are experiencing unfavorable financial conditions such as negative performance feedback and financial constraints. Our research contributes to the literature on family firms by specifically addressing their impact on securities fraud through the lens of the ‘dark side’ of the SEW perspective.

Drawing on attribution theory and expectancy violation theory, this study investigates the effect of corporate social responsibility (CSR) on stock market reactions in the context of intentional crises, during which stakeholders are likely to attribute crisis responsibility to the focal firm. Using a sample of Chinese listed firms from 2012 to 2022, we find that in the context of an intentional crisis, the stock market reacts more negatively to firms with higher prior CSR performance. Two contingency factors (i.e., media attention and state ownership) strengthen this negative relationship. This study contributes to the CSR literature by broadening knowledge of the insurance-like effects of CSR and by identifying a “boomerang effect” of CSR in the context of intentional crises.