Abstract: Abstract：The ownership structure of family firms, as an important and influential factor on the corporate investment, determines whether family control alleviates or exacerbates financial constraints. The paper, by means of an estimation of system GMM based on dynamic panel data, analyses the function of family control and investment-cash flow sensitivity and studies the relationship among family control, financial constraints and corporate investment. The analysis shows that family control plays a negative moderating role significantly, lowers investment-cash flow sensitivity and alleviates the problem of serious financing constraints. Furthermore, the results also show that the difference in the type of family control has different degree influence on the relationship between financial constraints and corporate investment. These results make clear that the ownership structure of family firms plays an important role in finding market opportunities and promoting corporate value. They also explain well of the specific manifestation of dynamic enhancement of the current mixed ownership, in which family firm shares in the state-owned enterprises.

Key words: family control, financial constraints, corporate investment, investment-cashflow sensitivity