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Implications of Intra-Family and External Ownership Transfer Of Family Firms: Short Term and Long Term Performance

Author

Listed:
  • Wennberg, Karl

    () (The Ratio Institute and Stockholm School of Economics)

  • Wiklund, Johan

    () (Whitman School of Management)

  • Hellerstedt, Karin

    () (Jönköping International Business School)

  • Nordqvist, Mattias

    () (Jönköping International Business School)

Abstract

We contrast the performance consequences of intra-family vs. external ownership transfers. Investigating a sample of all private family firms in Sweden that went through ownership transfers during ten years, we find family firms transferred to external owners outperforming those transferred within the family, but that survival is higher among intra-family transfers. We attribute these performance differences to the long-term orientation of family firms passed on to the next generation and to the entrepreneurial willingness of acquirers to bear uncertainty. Based on distinct ownership transition routes and theoretical mechanisms explaining performance differences, we outline implications for family business and entrepreneurship research.

Suggested Citation

  • Wennberg, Karl & Wiklund, Johan & Hellerstedt, Karin & Nordqvist, Mattias, 2011. "Implications of Intra-Family and External Ownership Transfer Of Family Firms: Short Term and Long Term Performance," Ratio Working Papers 172, The Ratio Institute.
  • Handle: RePEc:hhs:ratioi:0172
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Henrik Harms, 2014. "Review of Family Business Definitions: Cluster Approach and Implications of Heterogeneous Application for Family Business Research," International Journal of Financial Studies, MDPI, Open Access Journal, vol. 2(3), pages 1-35, July.
    2. Ahrens, Jan-Philipp & Landmann, Andreas & Woywode, Michael, 2015. "Gender preferences in the CEO successions of family firms: Family characteristics and human capital of the successor," Journal of Family Business Strategy, Elsevier, pages 86-103.
    3. Basco, Rodrigo, 2013. "The family's effect on family firm performance: A model testing the demographic and essence approaches," Journal of Family Business Strategy, Elsevier, pages 42-66.
    4. Felix K. Thiele, 2017. "Family businesses and non-family equity: literature review and avenues for future research," Management Review Quarterly, Springer;Vienna University of Economics and Business, vol. 67(1), pages 31-63, February.
    5. Rajiv Agarwal & Arya Kumar & Keith D'Souza, 2016. "Issues in Career Choices of Successors in Family Businesses: Perspective from Literature Review," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 5(1), pages 1-19, February.
    6. repec:aes:icmbdj:v:2:y:2016:i:1:p:122-135 is not listed on IDEAS
    7. Dehlen, Tobias & Zellweger, Thomas & Kammerlander, Nadine & Halter, Frank, 2014. "The role of information asymmetry in the choice of entrepreneurial exit routes," Journal of Business Venturing, Elsevier, vol. 29(2), pages 193-209.
    8. Bertoni, Danilo & Cavicchioli, Daniele & Latruffe, Laure, 2016. "Impact of succession on performance: The case of the Italian family farms," 149th Seminar, October 27-28, 2016, Rennes, France 245166, European Association of Agricultural Economists.
    9. Bird, Miriam & Wennberg, Karl, 2014. "Regional influences on the prevalence of family versus non-family start-ups," Journal of Business Venturing, Elsevier, pages 421-436.
    10. Shujun Ding & Zhenyu Wu, 2014. "Family Ownership and Corporate Misconduct in U.S. Small Firms," Journal of Business Ethics, Springer, pages 183-195.

    More about this item

    Keywords

    long-term orientation; succession; ownership transfer; family firms; performance;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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