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Succession financing in family firms

  • Christian Koropp

    ()

  • Dietmar Grichnik
  • André Gygax

    ()

Registered author(s):

    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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    File URL: http://hdl.handle.net/10.1007/s11187-012-9442-z
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    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
    Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100338

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