Does business succession enhance firms’ innovation capacity? Results from an exploratory analysis in Italian SMEs

Andrea Ganzaroli (), Gianluca Fiscato () and Luciano Pilotti

Departmental Working Papers from Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano

Abstract: Our main objective with this paper is to explore business transfer as as potential source of innovation in Small and Medium-sized Enterprises (SMEs). The literature on the subject has mainly focused to business succession as process through which ownership and control is transferred between generation of entrepreneurs. In this paper we argue that nowadays the aim of business succession should not only replace existing entrepreneurial resources, but enhancing firms’ innovation capacity. Our contribution moves into two major directions. The first explores the relationhip between business succession and innovation from a theoretical point of view. The second deepens such an understanding by assessing it on a sample of micro and small enterprises located in Emilia Romagna. We show that business transfer/succession in SMEs is not perceived as potential source of innovation. Business transfer still takes place mainly within the family. SMEs show little propensity to saparte ownership form management as way to enhance firms’ likelihood to survive to business transmission. Senior entrepreneurs’ show little propensity to invest on juniors’ training. As result juniors lack of an autonomous business vision and do not perceive themselves as the main driver of innovation. Such a perspective is even supported by seniors, who do not expect business succession to make any difference on the way business is currently managed

Keywords: family business; succession; small and medium-sized enterprise; innovation (search for similar items in EconPapers)
JEL-codes: G30 G32 G34 (search for similar items in EconPapers)
Date: 2006-10-20
New Economics Papers: this item is included in nep-cse, nep-ent and nep-fin
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:mil:wpdepa:2006-29

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