Coexisting with the national will: state logic and intrafamily succession

Based on the institutional perspective and socioemotional wealth (SEW) theory, this paper examines the impact of state logic, which is prevalent in the institutional environments of emerging markets, on the intrafamily succession intention (IFSI) of family firms. We posit that state logic shapes the set of institutional arrangements that constrain the family-centered socioemotional goals of family firms. Thus, the prevalence of a dominant state logic is negatively related to the probability of family business owners holding IFSI. However, the political power of owners can be leveraged to alleviate and even reverse this negative relationship. Moreover, the influence of political power is pronounced in settings with underdeveloped market institutions but not in those with developed ones. An empirical analysis of 774 fully family-controlled Chinese companies considering intrafamily succession substantiates our hypotheses.