The 'Shadow of Succession' in Family Firms

Sandra Denise Diwisch, Peter Voithofer, Christoph Weiss

Publikation: Working/Discussion PaperWU Working Paper

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The paper analyses the relationship between succession and firm performance. Using a unique panel data set on a sample of roughly 4,000 Austrian family firms we examine empirically the impact of past succession as well as future succession plans on employment growth and investment behaviour. Analysing succession plans, we do not find a 'shadow of succession' effect. No significant difference in employment growth and investment behaviour is found between firms that plan to transfer the firm in the next ten years and those who do not. In contrast, past succession exerts a significant and positive employment growth effect which becomes stronger over time. The impact of past succession on investments is also positive but not significantly different from zero. Thus, our findings provide support for the existence of a positive employment shadow after a transfer, whereas the shadow of succession hypothesis has to be rejected prior to transition. (author's abstract)
HerausgeberSFB International Tax Coordination, WU Vienna University of Economics and Business
PublikationsstatusVeröffentlicht - 2005


ReiheDiscussion Papers SFB International Tax Coordination

WU Working Paper Reihe

  • Discussion Papers SFB International Tax Coordination