The Life Cycle, Business Strategy, and Selection and Transition of the Financial Patterns in Chinese Family-owned Companies

The biggest bottleneck that the family-owned companies in China have faced during their growth process is "financing difficulty." This paper discusses how the life cycle, business strategy, and other factors affect the selection and transition of financial patterns in Chinese family-owned companies under the "financing difficulty" background. Based on the case of the Mengniu Dairy Company, this paper constructs an integrated theoretical framework, and points out that life cycle and business strategy are two important factors influencing selection and transition of family-owned companies' financial patterns in China. The life cycle directly affects family-owned companies' optional financial patterns and their transitions; the business strategy affects the demand for financial capital of family-owned companies and thereby indirectly affects the selection and transition of family-owned companies' financial patterns. In addition, the life cycle affects the selection and transition of family-owned companies' financial patterns by affecting the choice of business strategy.