Leadership succession and corporate social responsibility in family firms

This study investigates the impact of CEO succession on corporate social responsibility (CSR) performance in family firms. Drawing on socioemotional wealth perspective, we argue that CEO succession creates tension between financial accountability and non-financial objectives as successors seek to establish legitimacy and maintain organizational stability. During this period, successors are likely to prioritize financial accountability, organizational continuity, and family control, reducing attention to reputational objectives maintained through CSR. We further propose that external pressures, including peer firms’ CSR practices and media attention, moderate this relationship by increasing the legitimacy costs of reducing CSR engagement. Using data from Chinese family firms, we find that CSR performance declines significantly one to two years after succession. This negative relationship is stronger when external pressure is weak but is mitigated, and may even reverse, under stronger peer and media pressures. Our findings demonstrate how family firms balance financial and non-financial objectives during leadership transitions.