The Dual Stimulus-Decay Mechanism of Imprinting: Can the Imprint of Poverty Encourage Family Firms to Participate in the Third Distribution?

Abstract

The central strategy of China′s Reform and Opening up process is to allow some people to reach prosperity first, then push those people to help others following in their wake, thus finally achieving common prosperity. It is therefore crucial to consider whether those who are first to benefit from the reform have sufficient internal motivation to participate in the third distribution. Some scholars claim that most of the first generation of Chinese entrepreneurs experienced the adversity of poverty in their early lives, which can foster their empathy tendency and lead them to possess a stronger psychological motivation to participate in the third distribution. Others argue that family firms are more interested in creating wealth for inheritance and may not be willing to assume the social responsibility of the third distribution. However, few studies have explored whether the imprint left by poverty is an effective motivator in the context of family firms. Moreover, little is known about how the characteristics of family firms affect the dynamic mechanism which links the imprint of poverty to support for the third distribution. Therefore, this paper attempts to study the influence mechanism of the poverty imprint of private entrepreneurs on firms′ participation in the third distribution, especially the influence of family firms′ situational factors on the dynamic mechanism of imprinting. Based on the imprinting theory, we develop a dual stimulus-decay mechanism of the imprint of poverty, which can reflect how party membership of entrepreneurs can stimulate the imprint of poverty, while at the same time perk consumption can decay it. In addition, we summarize four characteristics of family firms that distinguish them from non-family firms—the pursuit of family-centered non-economic goals, unique family culture, personalized control of firms, and the long-term orientation of the family management—and discuss the concrete influence of these four characteristics on the dynamic mechanism of poverty imprinting. Using a dataset of 23, 788 Chinese listed firm-year observations from 2006 to 2019, we investigate the relationship between the poverty experience of entrepreneurs and firms′ participation in the third distribution, focusing on differences between family and non-family firms. Finally, we subdivide family businesses into founder-led family firms, family-managed firms, and later-generation family firms according to the degree of family involvement, and further investigates the differential effect of family firm heterogeneity on the stimulus-decay mechanism. The empirical results are as follows: First, the poverty imprint of entrepreneurs can significantly increase firms′ participation in the third distribution, especially for family firms. Second, entrepreneur′s party membership can stimulate the poverty imprint, thereby positively moderating the relationship between poverty imprint and firms′ participation in the third distribution, while perk consumption can decay it, thereby negatively moderating the relationship between poverty imprint and the third distribution. Third, the stimulating effect of party membership is more significant in family firms, while the decaying effect of perk consumption is more significant in non-family firms. Finally, through our analysis of the heterogeneity of family firms, we find that the entrepreneur′s poverty imprint has a more significant positive impact on participation in the third distribution in family-managed firms and founder-led family firms, while the effect is relatively weak in the later-generation family firms. Our research findings make three contributions to the literature. First, this paper enriches the theoretical mechanism of Chinese entrepreneurs′ participation in the third distribution by constructing a dual stimulus-decay mechanism of the imprint of poverty. Specifically, our investigation of the positive impact of party membership and the negative impact of perk consumption not only contributes to research into the psychological mechanisms which lead entrepreneurs to participate in the third distribution, but also expands theoretical research on the dynamic evolution of the imprint of poverty. Second, the dynamic mechanism of poverty imprinting is placed in the context of family firms, and the differences of the dual stimulus-decay mechanism of poverty imprinting between family and non-family firms are explored, thus deepening understanding of the underlying motivations leading family firms to participate in the third distribution. Third, our investigation of the differential effect of family firm heterogeneity on the dual stimulus-decay mechanism of poverty imprinting provides a new research perspective for understanding the heterogeneity of the third distribution in diverse family firms in reality. Our results show that the poverty imprint of entrepreneurs in founder-led family firms and family-managed firms is more significant in the third distribution, which can expand the scope of research on the heterogeneity of family firms′ participation in social responsibility.

Department(s)

Business and Information Technology

Comments

National Office for Philosophy and Social Sciences, Grant 20VYJ073

Keywords and Phrases

Family firms; Party membership; Perk consumption; Poverty imprint; The third distribution; 党员身份; 在职消费; 家族企业; 第三次分配; 贫困烙印

International Standard Serial Number (ISSN)

1004-6062

Document Type

Article - Journal

Document Version

Citation

File Type

text

Language(s)

English

Rights

© 2024 Zhejiang University, All rights reserved.

Publication Date

01 Jan 2024

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