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We integrate insights behavioral theory of the firm, social psychology, and family business literature to examine the role of CEO's financial aspiration in engaging in corrupt transactions. Building on a survey of 196 family firms in China, we found that the relationship between realization extent of CEO's financial aspiration and likelihood of engaging in corruption is inverted U shaped. We also found CEO's religious belief as an important moderator between CEO's financial aspiration and firm-level corruption. Religious belief decreases the CEO's motivation to offer bribes to government officials to achieve short-term economic benefits via strict ethical judgement, which in turn weakens the positive effects of low level achievement of CEO's financial aspiration on family firm's corruption.

During family firm succession, parent-incumbents are often caught up in a paradox of both empowering and dominating their child-successors. To understand this recurring phenomenon, we draw from socioemotional wealth literature and a philosophical account of the power-transfer paradox in ancient patriarchal monarchies to hypothesize that parent-incumbents tend to exert generational coercive control when their child-successors are seen as very unwilling and incapable or very willing and capable of taking over patriarchal family organizations. We test our hypotheses in three studies. In Study 1, we coded data from succession cases in Chinese patriarchal monarchies (403 BC to 959 AD) and found support for the predicted non-linear effects of successor-princes' willingness (63 cases) and capability (80 cases) on their father-kings' coercive control (persecuting or murdering the princes). In Study 2, based on survey data from parent–child dyads of 157 family firms in Taiwan and mainland China, again, we found U-shaped effects of child-successors' willingness and capability on parent-incumbents' coercive control (restraining successors' power). Moreover, parent-incumbents' highly narcissistic personality attenuated these U-shaped relationships because they tend to devalue their child-successors' willingness and capability. In Study 3, we conducted a survey of 103 parent–child dyads in family firms in mainland China and found a U-shaped relationship between capability and coercive control only when incumbents' roles in the family and at work were highly intertwined.