Frank Halter

In our quantitative study we investigate the antecedents of two distinct exit routes. Building on information asymmetry theory, we discuss that the owner's inferior knowledge about the ability of potential family external (in contrast to family internal) successors renders a family internal transition more likely. However, this information asymmetry can be mitigated by activities such as owners' screening and successors' signaling efforts to unveil the successor's ability. Our data exhibits a positive effect of signaling and an inverted u-shaped effect of screening on the probability of an external succession. Socioemotional wealth, generated by long ownership duration, moderates these effects.

A review of articles dealing with successors has shown a main consideration of the successor from the perspective of family succession. Thereby, the topic is mainly considered from the incumbent owner's standpoint or that of the family, thus, only unbalanced insights into the dynamics of company succession are provided. However, with regard to the future, the successor's perspective is more decisive as he or she represents the person who is in charge of the company's continuity. Additionally, recent research implies that non-family succession is upgraded in relation to family succession. Overall, it can be argued that an increased focal point on successors´ special requirements is highly in need. By taking the successor's standpoint in this study, we examine if there are potential differences between external and internal successors regarding the succession process. Particularly, we are interested in identifying likely differences between the two types of successor regarding their need for support, their level of qualification, and their succession preparation.

Johann, Tobias; Koch, Hendrik; Halter, Frank; Klandt, Heinz 2007: . Gdansk University of Technology, Poland, 8-11 July 2007.