Research on the Influence of Founder Control on Enterprise Growth

DOI

10.2991/assehr.k.200331.106How to use a DOI?

Keywords

founder, control, enterprise growth, institutional environment, board characteristics

Abstract

As China’s economy booms, more and more start-ups are seeking to go public, but that has led to a battle for control between founding teams and outside investors. How to realize the reasonable allocation of control rights in corporate governance structure has become the focus of theoretical and practical research. Through sorting out the existing literature, this paper, in connection with the actual situation of domestic enterprises, starts from the relevant theories of founders’ control rights, and explores the influence mechanism of founders’ control rights on the growth of enterprises. In order to further analyze the influence path between the two, this paper firstly reviews the research concept of founders’ right of control, and further sorts out the source of founders’ right of control, so as to define founders’ right of control. Secondly, it explores the influence of different forms of founder’s control on enterprise growth. Finally, it discusses the regulating effect of the characteristics of the board of directors and the external institutional environment on the relationship between founders’ control rights and the growth of enterprises. The main conclusions of this study are as follows: for the research samples in this paper, founder control has a positive impact on the growth and development of enterprises; the external institutional environment will negatively regulate the relationship between the strength of founders’ control rights and the growth of enterprises. The combination of two roles and the shareholding ratio of other members of the board of directors positively moderates the relationship between founders’ control rights and enterprise growth, while the moderating effect of the ratio of independent directors is not significant, which rejects the research hypothesis. The research on the relationship between founders’ right of control and enterprise growth can not only theoretically broaden the research margin of entrepreneur theory, but also further reveal the internal mechanism of enterprise growth and development from the perspective of key figures. At the same time, it provides reference for the current “battle for control rights” and the design of the equity structure of start-ups.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Yi Qiu
AU  - Xin Zhao
PY  - 2020
DA  - 2020/04/02
TI  - Research on the Influence of Founder Control on Enterprise Growth
BT  - Proceedings of the 5th International Conference on Social Sciences and Economic Development (ICSSED 2020)
PB  - Atlantis Press
SP  - 505
EP  - 512
SN  - 2352-5398
UR  - https://doi.org/10.2991/assehr.k.200331.106
DO  - 10.2991/assehr.k.200331.106
ID  - Qiu2020
ER  -