Family Firms and the 'Willing Successor' Problem

19 Pages Posted: 28 Oct 2016

See all articles by Simon C. Parker

Simon C. Parker

University of Western Ontario; Durham University - Department of Economics and Finance; IZA Institute of Labor Economics

Date Written: November 2016

Abstract

Many family business owners want their offspring to continue the family business after they have retired. However, they may lack “willing successors.” Drawing on resource‐based logic, this paper proposes parental business strategies which enhance the attractiveness of continuation by offspring. These strategies include investment in intangible capital, which is less valuable if offspring sell the firm, and high levels of parental effort. As a by‐product, these strategies enhance the financial performance and longevity of those family firms which adopt them, and might help explain the global prevalence of family firms as an organizational form.

Suggested Citation

Parker, Simon C., Family Firms and the 'Willing Successor' Problem (November 2016). Entrepreneurship Theory and Practice, Vol. 40, Issue 6, pp. 1241-1259, 2016. Available at SSRN: https://ssrn.com/abstract=2859809 or http://dx.doi.org/10.1111/etap.12242

Simon C. Parker (Contact Author)

University of Western Ontario ( email )

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IZA Institute of Labor Economics

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