Nadine Kammerlander

Our quantitative study investigates the determinants of internal versus external exit routes in family firms. Building on information asymmetry theory, we examine how an owner's inferior knowledge about the abilities of potential external entrants (in contrast to family internal successors) renders a family internal transfer more likely. This information asymmetry, however, can be mitigated by activities such as owners' screening and transfer candidates' signaling efforts to reveal the candidates' abilities. Our data exhibits a positive effect of signaling and an inverted U-shaped effect of screening on the probability of external exit routes. Firm age, as a driver of emotional attachment, weakens these effects.

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.

Achieving success and competitiveness requires constant effort - on the part of individual companies as well as the Swiss economy as a whole. This study, which is based on a representative survey of more than 2,000 Swiss SMEs, contributes to the debate on Switzerland's sustainable success as an economic center and examines the current political direction from an SME perspective. As part of this year's focal theme of company succession, we additionally examine how SMEs pass on their businesses and successful formulas to the upcoming generation of entrepreneurs and look at which factors play an important role in ensuring that the handover goes as smoothly as possible in practice.