Family Firm Succession

• Eduardo L. Giménez ^[1] ; José Antonio Novo ^[2]
  1. [1] Universidade de Vigo

     Universidade de Vigo

     Vigo, España

     
  2. [2] Universidade da Coruña

     Universidade da Coruña

     A Coruña, España

     
• Localización: Documentos de Traballo. Análise Económica, ISSN 1138-0713, Nº. 58, 2015, págs. 1-61
• Idioma: inglés
• Enlaces
  • Texto completo (pdf)
• Resumen

  • We present a theory of family firm succession in which the incumbent regards a family member as a potential successor, as well as an outside candidate. Our setting considers that the incumbent can spend resources on training the family manager, as a key element in the intra-family transmission. The choice is explained in terms of quality of the candidates, monitoring costs, effectiveness of the training process and amenities. Our results account for observed findings, such as the partial retirement, the underperformance after succession, or the selection of a non-family manager only if he is markedly better than the family candidate.