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Succession financing in family firms

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  • Christian Koropp

    ()

  • Dietmar Grichnik
  • André Gygax

    ()

Abstract

Business succession is one of the primary management challenges for family firms. However, many family firms fail at this task because of financial issues. Although a vast number of studies have investigated the succession process, research thus far has failed to determine how and why family firms select particular forms of financing for succession-related expenditures. Accordingly, this study conceptually and empirically investigates succession financing. We introduce a conceptual framework that investigates the reasons behind an owner-manager’s intent to use debt for succession financing. Specifically, our model accounts for general and succession-related personal factors. However, we also include a set of firm-specific financing behavioral controls in our research. The empirical results are derived from a sample of 187 German family firms, and the results highlight financial knowledge, attitudes, succession experience, and succession planning as significant determinants of the owner-managers’ debt usage intentions. The implications and avenues for future research are discussed. Copyright Springer Science+Business Media, LLC. 2013

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Bibliographic Info

Article provided by Springer in its journal Small Business Economics.

Volume (Year): 41 (2013)
Issue (Month): 2 (August)
Pages: 315-334

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Handle: RePEc:kap:sbusec:v:41:y:2013:i:2:p:315-334

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Web page: http://www.springerlink.com/link.asp?id=100338

Related research

Keywords: Family firms; Succession; Decision making; Debt financing; G32; L26;

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References

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Cited by:
  1. Rasoul Shafieyoon & Marjan Mansouri, 2014. "Factors Dominating the Continuity and Decline of Family Businesses," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(1), pages 327-343, January.

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