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Family Firm Succession

Author

Listed:
  • Eduardo L. Giménez

    () (Universidade de Vigo)

  • José Antonio Novo

    () (Universidade da Coruña)

Abstract

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.

Suggested Citation

  • Eduardo L. Giménez & José Antonio Novo, 2015. "Family Firm Succession," Documentos de trabajo - Analise Economica 0058, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia.
  • Handle: RePEc:edg:anecon:0058
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    References listed on IDEAS

    as
    1. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, June.
    2. Agrawal, Anup & Knoeber, Charles R. & Tsoulouhas, Theofanis, 2006. "Are outsiders handicapped in CEO successions?," Journal of Corporate Finance, Elsevier, vol. 12(3), pages 619-644, June.
    3. Isakov, Dušan & Weisskopf, Jean-Philippe, 2014. "Are founding families special blockholders? An investigation of controlling shareholder influence on firm performance," Journal of Banking & Finance, Elsevier, vol. 41(C), pages 1-16.
    4. Johan Eklund & Johanna Palmberg & Daniel Wiberg, 2013. "Inherited corporate control and returns on investment," Small Business Economics, Springer, vol. 41(2), pages 419-431, August.
    5. Cucculelli, Marco & Micucci, Giacinto, 2008. "Family succession and firm performance: Evidence from Italian family firms," Journal of Corporate Finance, Elsevier, vol. 14(1), pages 17-31, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Family firm; succession;

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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