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On private equity exits of family firms in the German Mittelstand

Author

Listed:
  • Florian Kreer

    (RWTH Aachen University)

  • René Mauer

    (ESCP Europe)

  • Steffen Strese

    (RWTH Aachen University)

  • Malte Brettel

    (RWTH Aachen University)

Abstract

There is limited existing research on factors influencing the preferences of family firms’ owner-managers for specific modes of external transitions of ownership such as private equity. In a multi-method approach, this study qualitatively gathers the attitudinal beliefs of family firms’ owner-managers about pursuing the private equity succession route. Four classes of beliefs are identified: perceptions of (1) firm continuance; (2) opportunities for firm development; (3) loss of firm ethos; and (4) commercial firm risks. These classes are then tested quantitatively with a sample of 195 family firm owner-managers among the German Mittelstand. Our results partially confirm the qualitative findings: the perception of positive development opportunities and the perception of commercial firm risks explain owner-managers’ intention to pursue a private equity succession, mediated through attitude. Overall, attitude emerges as the cornerstone in this context-specific intention model.

Suggested Citation

  • Florian Kreer & René Mauer & Steffen Strese & Malte Brettel, 2018. "On private equity exits of family firms in the German Mittelstand," Journal of Business Economics, Springer, vol. 88(3), pages 503-529, May.
    • Handle: RePEc:spr:jbecon:v:88:y:2018:i:3:d:10.1007_s11573-017-0870-8
    DOI: 10.1007/s11573-017-0870-8
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    More about this item

    Keywords

    Family firm succession; Managerial decisions; Private equity; Mittelstand; Theory of planned behavior;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • D10 - Microeconomics - - Household Behavior - - - General

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