Family business succession and the impact of CEO experience on the growth of small family firms

Eddy Laveren, David Helleboogh, Vincent Molly and Arthur Limere

International Journal of Entrepreneurship and Small Business, 2010, vol. 11, issue 3, 242-262

Abstract: The studies on the relationship between the depth of the entrepreneur's experience and firm growth shows inconsistent and inconclusive results. A comprehensive understanding of this matter is especially valuable in the context of family business successions, given that many companies seem to be unsuccessful in conquering the difficulties surrounding a succession. The reason is the fact that successors often lack experience when taking over the company. Based on a sample of 511 small family firms, our results suggest a positive and curvilinear effect of CEO experience on firm performance. Experience is contributive to the growth in value added up to a certain number of years that the CEO is in a CEO position, after which it becomes counterproductive. Firms with CEOs currently holding multiple directorships are also found to generate significantly higher performance levels and that growth rates appear to lessen according to the age of the CEO.

Keywords: CEO experience; firm growth; family businesses; chief executive officers; CEOs; curvilinear effects; company performance; multiple directorships; added value; CEO age; performance levels; growth rates; successors; Belgium; tenure; Flanders; small and medium-sized enterprises; SMEs; entrepreneurs; entrepreneurship; family firms; financing; corporate governance; succession issues. (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (2)

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