| Abstract | Family business have a strong power of cohesion and exclusivity, who follows the pattern of difference sequence. In the background of growth and transformation, this principle affects the behavior and performance of family business. Based on agency theory and socio-emotional wealth theory, this paper studies the interrelationship between family involvement, corporate social responsibility and firm performance. Using the Ninth National Private Enterprise Survey data, this paper found that: First, asymmetric altruism and nepotism caused by family involvement inhibit the investment of family business’s internal corporate social responsibility, while do not significantly enhance the investment of family business’s external social responsibility. Moreover, the family formal governance can weaken the negative influence of family involvement and internal social responsibility, it can also strengthen the incentive role of family involvement in external social responsibility. Second, the investment of internal social responsibility and external social responsibility can not only play an independent role, but also they have a complementary role in improving firm performance. The conclusions above mean that the family involvement will indirectly affect firm performance through the fulfillment of two kinds of corporate social responsibility. Family formal governance can ensure the ensure the growth of firm performance by weakening the negative impacts of family involvement and internal social responsibility while strengthening the investment incentives of family involvement to external social responsibility. This paper reveals the positive significance of the governance transformation of family business: It is the key to enhance governance efficiency, actively fulfill social responsibility and maintain a lasting competitive advantage that family business could beyond the intervention of the traditional nepotism, patriarchal authority and family will. |