On November 18, 2023, CKGSB and Shantou University unveiled a joint Chinese Family Business Research Center at the 19th International Symposium on Entrepreneurship and Family Enterprises at Shantou University.
The Chinese Family Business Research Center aims to study key topics concerning family businesses from China, such as governance, inheritance and family wealth management, through jointly establishing a family business database, conducting empirical research and producing case studies based on the research strength and academic resources of both schools.
At the symposium, Dr. Li Haitao, Dean’s Distinguished Chair Professor of Finance and Associate Dean at CKGSB, delivered a speech titled “Shirtsleeves to Shirtsleeves in Three Generations: An Economic Model of Family Business Dynamics.” In his remarks, he shared an economic model of the growth dynamics of family businesses and explained why children or grandchildren face challenges in managing the wealth passed on to them. Interestingly, according to Professor Li, “‘the shirtsleeves to shirtsleeves’ curse is a result of the older generation being too capable, rather than the next generation being incapable”.
Similar to how asset prices eventually revert to their long-term mean or average level, family businesses will eventually plateau and decline. That means despite the successful cases of family business inheritance, the danger of declining family wealth across generations is real and in line with the law of economic development. To break this pattern, Professor Li proposed two solutions. Family businesses should build an optimal investment scheme and foster healthy consumption behaviors to sustain and grow family wealth, ensuring a smooth inheritance of family wealth across generations. What’s more, family business leaders should maximize long-term value and family interests—like their peers of Fujian and Chaoshan origins—and develop the next generation of family members and business successors under these spirits.
The launching ceremony of the research center was witnessed by Professor Wang Quan, Executive Vice-President of Shantou University; Dr. Luo Minjie, Executive Director of Li Ka-shing Shantou University Development Foundation; Dr. Yan Aimin, Professor of Management and Associate Dean at CKGSB; Dr. Li Haitao, Dean’s Distinguished Chair Professor of Finance and Associate Dean at CKGSB; Professor Liang Qiang, Dean of Business School of Shantou University; and Ms. Chen Jun, Associate Director of External Affairs at CKGSB.