Family Firm Succession

Eduardo Giménez and José Antonio Novo ()
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José Antonio Novo: Universidade da Coruña

No 58, Documentos de trabajo - Analise Economica from IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia

Abstract: We present a theory of family firm succession in which the incumbent regards a family member as a potential successor, as well as an outside candidate. Our setting considers that the incumbent can spend resources on training the family manager, as a key element in the intra-family transmission. The choice is explained in terms of quality of the candidates, monitoring costs, effectiveness of the training process and amenities. Our results account for observed findings, such as the partial retirement, the underperformance after succession, or the selection of a non-family manager only if he is markedly better than the family candidate.

Keywords: Family firm; succession (search for similar items in EconPapers)
JEL-codes: M1 M5 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2015-12
New Economics Papers: this item is included in nep-bec
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Persistent link: https://EconPapers.repec.org/RePEc:edg:anecon:0058

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