Intra-family successor selection: The signaling value of entrepreneurship

Jasper Brinkerink, Massimo Baù, Alfredo De Massis, Johan Karlsson, Philipp Sieger

Research output: Contribution to conferencePaper

Abstract / Description of output

Entrepreneurial parents aspiring to transfer their business to one of their children face information asymmetries regarding the entrepreneurial commitment and competence of each of their offspring, complicating identification of the most suitable successor. We posit that offspring’s independent entrepreneurial experience and performance serve as costly and hard-to-imitate signals of their entrepreneurial commitment and competence, respectively, mitigating these information asymmetries. Accordingly, we assess the signaling value of entrepreneurship in a large sample of Swedish intra-family successions. In line with our predictions, we find that offspring’s independent entrepreneurial experience positively affects the likelihood of becoming a successor in their parents’ business, and that this effect is stronger at higher levels of parental firm performance. Partly contradicting our curvilinear hypothesis, however, we find a distinctly negative effect of offspring’s independent entrepreneurial performance on the likelihood of becoming a successor. Our findings thus suggest that offspring’s early-career entrepreneurial activities indeed signal information relevant to the intra-family succession process, yet may do so in ways that do not guarantee selection of the most capable intra-family successors for the parental firm. We thereby contribute to literatures on entrepreneurial careers, succession, entrepreneurial families, and signaling theory.
Original languageEnglish
Publication statusAccepted/In press - 2023
EventBabson College Entrepreneurship Research Conference - Knoxville, United States
Duration: 7 Jun 202310 Jun 2023
Conference number: 2023


ConferenceBabson College Entrepreneurship Research Conference
Abbreviated titleBCERC
Country/TerritoryUnited States
Internet address


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