Succession of Social Capital in Chinese Family Businesses

This paper reports on a study which aims to add to the theoretical understanding of how social capital is transferred from one generation to the next in business families. Studies in the field of family business have emphasized the importance of succession for the survival of family businesses, but while the succession process and planning have been widely studied, the examination of social capital succession is scarce. As for the studies in family social capital, the importance of social capital as a source of competitive advantage which already exists in business families have often been expressed, but there is a lack of research in the means of transferring this form of capital from the family business leaders to their successors.
The study presented here addresses this gap in family business succession literature and family social capital literature, explaining the means of transgenerational succession of social capital in business families. This is ongoing multiple case study research which aims to investigate the means of social capital transmission by comparing the cases of five different Chinese family businesses in Macau, which are in the succession process, with the successor
currently managing the firm while the former generation business leaders are in the process of handing over the business and preparing for retirement. In doing so, this paper offers a theoretical framework for explaining the forms of social capital that exists in Chinese family businesses, and how these different forms of social capital are passed on from generation to generation.