The persistence of family firms: How does performance threshold affect family firm exit?

Symeonidou N., De Tienne D.R., Chirico F.

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Why firms with similar economic performance make different exit decisions? We find evidence that family firms have lower “performance thresholds” than non-family firms, reducing family firms’ likelihood of exit.

Using a longitudinal dataset, we examine differences in performance threshold between family and non-family firms and help clarify why some firms persist with their ventures even though their performance may indicate they should exit the market.

Our theory and related findings suggest that nonfinancial attributes such as identity, the ability to exercise family influence, and to hand the business down to future generations may affect family firms’ attitudes toward exit decisions.

In this study, we contribute to sharpening our understanding of exit in family firms while motivating future work on exit strategies in family firms and other contexts.


Reference

  • Symeonidou, N., DeTienne, D. R., & Chirico, F. (in press). The persistence of family firms: How does performance threshold affect family firm exit? Small Business Economics.
  • Link: https://doi.org/10.1007/s11187-021-00482-9


2022-06-14