This research investigates the relationship between family business governance structures and corporate performance, with particular attention to the moderating role of institutional environment. Drawing on agency theory, resource-based view, and institutional theory, the study develops an integrated theoretical framework that examines how family governance mechanisms influence organizational outcomes under varying institutional conditions. Using partial least squares structural equation modeling (PLS-SEM) with data from 382 publicly listed family businesses in China, the analysis reveals significant positive effects of family governance structure on corporate performance. The results demonstrate that ownership concentration positively influences financial performance (β = 0.184), family management involvement enhances innovation capacity (β = 0.256), and board diversity improves operational efficiency (β = 0.198). Institutional environment significantly moderates the governance-performance relationship, with both formal institutional quality (β = 0.145) and cultural embeddedness (β = 0.128) strengthening the positive effects of family governance. The study enhances family business literature by revealing governance as a multidimensional concept and illustrating the importance of the institutional context in determining governance effectiveness. For family business practitioners and policymakers, these insights are instrumental in devising context-tailored governance frameworks.

Yifan Lu. The Impact of Family Business Governance Structure on Corporate Performance: Analysis of the Moderating Role of Institutional Environment. Academic Journal of Business & Management (2025), Vol. 7, Issue 8: 40-48. https://doi.org/10.25236/AJBM.2025.070806.

[1] Thakur, V. and S. Sinha, Family governance structures in family businesses: A systematic literature review and future research agenda. Journal of Small Business Management, 2024. 62(6): p. 3016-3052.

[2] Radu-Lefebvre, M., J.H. Davis, and W.B. Gartner, Legacy in family business: A systematic literature review and future research agenda. Family Business Review, 2024. 37(1): p. 18-59.

[3] Gavana, G., P. Gottardo, and A.M. Moisello, Board diversity and corporate social performance in family firms. The moderating effect of the institutional and business environment. Corporate Social Responsibility and Environmental Management, 2023. 30(5): p. 2194-2218.

[4] Hitt, M.A., J.L. Arregle, and R.M. Holmes Jr, Strategic management theory in a post‐pandemic and non‐ergodic world. Journal of Management Studies, 2020. 58(1): p. 259.

[5] North, D.C., Institutions, institutional change and economic performance. Cambridge university press, 1990.

[6] Farooq, M., A. Noor, and N. Maqbool, How does corporate social responsibility affect financial distress? The moderating role of corporate governance. Social Responsibility Journal, 2023. 19(8): p. 1555-1573.

[7] Anwar, R. and A. Idris, Does Corporate Social Responsibility Increase Investment Efficiency During Economic Policy Uncertainty? Exploring the Moderating Role of Family and Non-Family Firms. SAGE Open, 2025. 15(2): p. 21582440251335520.

[8] Pu, Z., et al., A systematic review of the literature and bibliometric analysis of governance of family firms. Journal of Business Economics and Management (JBEM), 2022. 23(6): p. 1398-1424.

[9] Bettinelli, C., et al., Family Firms' Boards: A Systematic Review and Research Agenda. Corporate Governance: An International Review, 2024.

[10] Stasa, M. and O. Machek, Social capital in the family business literature: A systematic review and future research agenda. Family Business Review, 2022. 35(4): p. 415-441.

[11] Hair Jr, J.F., et al., Partial least squares structural equation modeling (PLS-SEM) using R: A workbook. Springer Nature, 2021.

[12] Baron, R.M. and D.A. Kenny, The moderator–mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of personality and social psychology, 1986. 51(6): p. 1173.

[13] Amin, A., et al., Female presence in corporate governance, firm performance, and the moderating role of family ownership. Economic Research-Ekonomska Istraživanja, 2022. 35(1): p. 929-948.

[14] Garcés-Galdeano, L., Editorial note: Heterogeneity in management and governance in family firms. Elsevier, p. 100484, 2023.

[15] Oduro, S., et al., Corporate social responsibility and family firm performance: A meta‐analytic review. Corporate Social Responsibility and Environmental Management, 2025. 32(2): p. 1412-1443.

[16] Ferasso, M., et al., Family Business Ethics: A Literature Review and Research Agenda. Journal of Business Ethics, 2025: p. 1-19.

[17] Manzi, M.A., et al., Financial accounting in family business: a systematic literature review and future research agenda. Journal of Management and Governance, 2024: p. 1-45.

[18] Rajan, B. and U. Salunkhe, Management Skills and Growth Strategies in a Post-Pandemic World. Transnational Marketing Journal, 2021. 9(2).

[19] Yu, M., CEO duality and firm performance: A systematic review and research agenda. European Management Review, 2023. 20(2): p. 346-358.