No. 172: Implications of Intra-Family and External Ownership Transfer Of Family Firms: Short Term and Long Term Performance

Karl Wennberg, Johan Wiklund, Karin Hellerstedt och Mattias Nordqvist
Augusti 2011

Abstract: We contrast the performance consequences of intra-family vs. external ownership transfers. Investigating a sample of all private family firms in Sweden that went through ownership transfers during ten years, we find family firms transferred to external owners outperforming those transferred within the family, but that survival is higher among intra-family transfers. We attribute these performance differences to the long-term orientation of family firms passed on to the next generation and to the entrepreneurial willingness of acquirers to bear uncertainty. Based on distinct ownership transition routes and theoretical mechanisms explaining performance differences, we outline implications for family business and entrepreneurship research.

Keywords: long-term orientation, succession, ownership transfer, family firms, performance

JEL CODES: L26, M13

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