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A Contractual Perspective on Succession in Family Firms

Author

Listed:
  • Bjuggren, Per-Olof

    (The Ratio Institute, Jönköping International Business School)

  • Sund, Lars-Göran

    (Jönköpings International Business School)

Abstract

This paper analyses succession in family firms from a contractual perspective. A firm is regarded as a nexus of contractual relations with owners, employees, suppliers of goods and services and customers. These contractual parties are in differing degrees tied to the firm through asset specificities. Succession can affect the value of such assets. In this sense they become stakeholders with vested interests in the succession process. The theoretical discussion of affected stakeholders is backed up by a survey study of 143 Swedish family-owned businesses that have been subject to succession. The results show that the opinions of close shareholders such as family members and incumbent mangers as well as those of other stakeholders such as suppliers and customers are important.

Suggested Citation

  • Bjuggren, Per-Olof & Sund, Lars-Göran, 2011. "A Contractual Perspective on Succession in Family Firms," Ratio Working Papers 181, The Ratio Institute.
    • Handle: RePEc:hhs:ratioi:0181
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    References listed on IDEAS

    as
    1. Williamson, Oliver E, 1988. " Corporate Finance and Corporate Governance," Journal of Finance, American Finance Association, vol. 43(3), pages 567-591, July.
    2. Per-Olof Bjuggren & Johanna Palmberg, 2009. "A Contractual Perspective of the Firm with an Application to the Maritime Industry," Chapters, in: Per-Olof Bjuggren & Dennis C. Mueller (ed.), The Modern Firm, Corporate Governance and Investment, chapter 4, Edward Elgar Publishing.
    3. Oliver E. Williamson, 2000. "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 595-613, September.
    4. Lars-Göran Sund & Per-Olof Bjuggren, 2007. "Family-owned, limited close corporations and protection of ownership," European Journal of Law and Economics, Springer, vol. 23(3), pages 273-283, June.
    5. Per-Olof Bjuggren & Dennis C. Mueller, 2009. "Introduction: The Modern Firm, Corporate Governance and Investment," Chapters, in: Per-Olof Bjuggren & Dennis C. Mueller (ed.), The Modern Firm, Corporate Governance and Investment, chapter 1, Edward Elgar Publishing.
    6. Bjuggren, Per-Olof & Sund, Lars-Goran, 2002. "A Transaction Cost Rationale for Transition of the Firm within the Family," Small Business Economics, Springer, vol. 19(2), pages 123-133, September.
    7. Per-Olof Bjuggren & Dennis C. Mueller (ed.), 2009. "The Modern Firm, Corporate Governance and Investment," Books, Edward Elgar Publishing, number 13362, December.
    8. Bjuggren, Per-Olof, 1995. "A transaction cost perspective on financial distress and capital structure," International Review of Law and Economics, Elsevier, vol. 15(4), pages 395-404, December.
    9. William M. Dugger, 1996. "The Mechanisms of Governance," Journal of Economic Issues, Taylor & Francis Journals, vol. 30(4), pages 1212-1216, December.
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    Cited by:

    1. Eva Niesten & Albert Jolink, 2014. "Absence of a market in the Dutch balancing mechanism: European rules versus specific investments," European Journal of Law and Economics, Springer, vol. 38(1), pages 71-90, August.

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    More about this item

    Keywords

    Succession; Family firms; Mutual dependence; Asset specificity; Nexus of contracts; Close and non-close stakeholders;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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