We study the governance effect of institutional site visits and focus on corporate payout. Due to the weak investor protection and poor information quality in China, institutional investors resort to site visits as a form of soft activism. We show that site visits lead to an increase of corporate cash dividend, through the mechanism of disciplining management with exit threats. Such effect is more pronounced for visits by state-owned institutions. We further confirm the causal link with both difference-in-difference analysis and instrumental variable regression. The paper contributes to the research on soft activism and governance device of institutional investors in weak institutional environments.

Family business plays important roles to fuel economic growth in China. Due to the one-child policy, family firms are increasingly facing human capital constraints for within-family succession. Having only one heir decreases the probability of continuing family management by over 3%, reduces the probability of adult children working in family firms by 14%, and significantly decreases founders' expectations of having young heirs for succession. Having fewer children negatively affects founder's expectation to go public, reduces family firm's reinvestment rate and R&D. Overall, the evidence suggests that the human capital constraints due to the one-child policy impose significant negative impacts on within-family succession. Dynastic management of family firms remains an important challenge for first-generation entrepreneurs in China.