How does family exit affect family business financialization?

This paper examines how the family exit of family businesses affects financialization, using family-owned firms in China's stock markets as samples. The study shows that family exit from executive positions to increase the proportion of non-family member executives has a facilitating effect on corporate financialization, and controlling family's reduced shareholding has a dampening effect on corporate financialization; providing equity incentives to executives helps to dampen the facilitating effect of family exit at the managerial level on corporate financialization compared to compensation incentives; and family exit reduces the degree of corporate financialization by increasing the level of corporate financing constraints.