It has been more than 30 years since China
opened private enterprises in 1978. Family firms is a very common type of
Chinese business. Family Succession have a significant economic impact on the
Chinese capital market. The purpose of this study is to explore the
relationship between Chinese family succession and the quality of financial
information. This study samples the A shares listed in China capital market
from 2008 to 2016 and finds that after the succession of Chinese family firms,
the quality of financial information has generally increased. However, after a
family company with political connection take over the succession of its
descendants, it will inhibit its earnings management and maintain the quality
of financial information.
JEL classification numbers: G30, M41.
Keywords: Family Succession,
Quality of Financial Information, Political Connections.