School of Business Seminar
Time: Noon – 1:20PM, Wednesday, February 9, 2011 (Pizza and soda will be served)
Place: Mid-Century Room, Campus Center
Family Firm Financing and the Social, Economic and Cultural Environment:
A Case of a Shipbuilder in Zhejiang Province, China
Hansong Pu, PhD
Entrepreneurship & Family Business Center
Hangzhou Dianzi University, Hangzhou, Zhejiang Province, China
Abstract: This research is an in-depth case study of a shipbuilding family firm in a coastal region of Zhejiang Province, China. The focus of this study is the firm’s project-based financing for external equities. Such practice is widely used by shipbuilders in that region to support their high growth, but is different from the “pecking order”, a broadly observed pattern of financing in western countries, particularly among family businesses. The Tradeoff Theory, Owner-Manager Preference Theory, Asymmetric Information and Agency Theory have played important roles in revealing the insights of the “pecking order”. This research demonstrates that the same theories can also explain those Zhejiang shipbuilders’ financing practice, if the social, economic and cultural environments are taken into consideration. From the theoretical perspective, this research brings an open-system view to the study of family business finance. It shows that many conclusions offered by previous researches are contingent on the environments. From a business perspective, this research helps understand what is behind the “China price”.
Speaker’s Bio: Dr. Hansong Pu is a Professor of Finance at the School of Management and the Director of Entrepreneurship & Family Business Center of Hangzhou Dianzi University in Hangzhou, Zhejiang Province, China. He is also a visiting professor at the School of Business at WPI. Professor Pu holds Ph.D. in Finance from the University of North Texas. Prior to his current academic career, Dr. Pu has worked as a management/business consultant, investment advisor, and corporate executive at a number of U.S. and global corporations including EDS, Invensys, and Prudential for almost twenty years. He has been a speaker at several international conferences on China’s economic reform and development, such as United Nations Regional Economic Development Conference in Beijing and St. Galen International Management Symposium in Switzerland. His recent research is focused on entrepreneurship and family business in Zhejiang Province, where the fast-growing regional economy has been driven by tens of thousands of entrepreneurial family businesses over the past twenty years. His research brings a unique perspective that is built upon modern finance theories and a comprehension of the local society and culture.
Acknowledgement: This seminar is sponsored by the Business International Education of the Dept of Education grant (PI: Professor Amy Zeng) and School of Business at WPI.