Management and ownership transfer in small and medium family farms

Renee D. Wiatt, Maria Marshall and Ryan Musselman

Agricultural Finance Review, 2022, vol. 82, issue 3, 505-521

Abstract: Purpose - This study investigated the succession process in small and medium family farms as two distinct but related processes of management transfer and ownership transfer. Past studies focused on the broad subject of succession, without dissecting succession into the components that it contains. Furthermore, this study aimed to evaluate which business, family and owner characteristics were significant in the progress of each process toward the actual transfer of management and ownership. Design/methodology/approach - Telephone interviews were conducted to gather information from rural family businesses in Illinois, Indiana, Michigan and Ohio. A bivariate ordered probit regression was utilized to model the processes of management and ownership transfer as separate but related processes. Both management transfer and ownership transfer were modeled utilizing three distinct stages of transfer. Findings - Business and owner characteristics were significant to both management and ownership transfer, whereas family characteristics only influenced ownership transfer. Farm family businesses that discussed goals, identified a successor and were educated on how to start the transfer process were more likely to have made progress in both management and ownership transfer. Originality/value - The authors contribute empirically to the literature by modeling the components of the succession process, management transfer and ownership transfer, as separate but interrelated processes. The authors specifically investigate which business, owner and family characteristics influence the progression of management and ownership transfer in farm family businesses.

Keywords: Succession; Family business; Ownership transfer; Management transfer; Farm succession (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eme:afrpps:afr-04-2021-0046

DOI: 10.1108/AFR-04-2021-0046

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