Family Ownership and Digital Transformation: The Role of Family Formal Business Networks and Next-Generation Dispersion

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Abstract
Digital transformation presents a crucial strategic imperative for family businesses seeking to maintain competitiveness and long-term viability. The academic literature reveals divergent perspectives on how family businesses approach digital transformation initiatives. This study adopts a socioemotional wealth perspective to examine the relationship between family ownership and digital transformation. The research specifically investigates how family formal business networks and next-generation dispersion moderate this relationship. Analysis of panel data from Chinese listed family firms between 2016 and 2020 reveals that family ownership negatively influences digital transformation efforts. However, this negative effect diminishes when family firms participate in formal business networks or involve multiple next-generation members in leadership positions. These findings yield important theoretical contributions regarding the intricate relationships between family dynamics and technological advancement. The research also provides practical insights for family business leaders navigating digital transformation challenges. This study advances understanding of how different dimensions of socioemotional wealth shape family firms’ strategic responses to technological change.

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