An Analysis of How to Improve Trust-Based Corporate Governance of Chinese Family Businesses

Trust is a very important resource for firms' operation and growth as well as for their achieving their goals.If trust is scarce,firm growth will be faced with tremendous costs in agency.Although the corporate governance of Chinese family businesses based on family trust has played a very important role in their growth,their further development is constrained by the decline of emotional trust and the absence of institutional trust.Thus,to improve the corporate governance of Chinese family business,strengthening institutional trust is necessary.