Exit Strategies in Family Firms: How Socioemotional Wealth Drives the Threshold of Performance
Entrepreneurship Theory and Practice, November 2013, DOI: 10.1111/etap.12067
38 Pages Posted: 9 Oct 2014 Last revised: 6 Feb 2020
Date Written: 2013
Although research has shown the ability to exit from both successful and unsuccessful ventures is important to founders, families, firms, industries, and overall economic health, exiting from a family firm can be especially challenging. In this paper, we examine exit strategies in the context of the family firm and the family firm portfolio. Drawing upon threshold theory and the socioemotional wealth perspective, we develop a model that provides guiding theoretical explanations for exit strategies. We address two questions: (1) why do family owners develop specific exit strategies, and (2) how do these strategies differ within family firms and family firm portfolios? In doing so, we contribute to family business, portfolio entrepreneurship, and exit literatures.
Keywords: Entrepreneurial Exit, Family Firm, Socioemotional Wealth, Sale, Liquidation, Succession
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