Title: Family business succession and the impact of CEO experience on the growth of small family firms

Authors: Eddy Laveren, David Helleboogh, Vincent Molly, Arthur Limere

Addresses: University of Antwerp, Faculty of Applied Economics, Prinsstraat 13, 2000 Antwerpen, Belgium. ' University of Antwerp, Faculty of Applied Economics, Prinsstraat 13, 2000 Antwerpen, Belgium. ' University of Antwerp, Faculty of Applied Economics, Prinsstraat 13, 2000 Antwerpen, Belgium. ' Faculty of Applied Economics, Campus Diepenbeek, Universiteit Hasselt, Agoralaan – Gebouw D, 3590 Diepenbeek, Belgium

Abstract: The studies on the relationship between the depth of the entrepreneur|s experience and firm growth shows inconsistent and inconclusive results. A comprehensive understanding of this matter is especially valuable in the context of family business successions, given that many companies seem to be unsuccessful in conquering the difficulties surrounding a succession. The reason is the fact that successors often lack experience when taking over the company. Based on a sample of 511 small family firms, our results suggest a positive and curvilinear effect of CEO experience on firm performance. Experience is contributive to the growth in value added up to a certain number of years that the CEO is in a CEO position, after which it becomes counterproductive. Firms with CEOs currently holding multiple directorships are also found to generate significantly higher performance levels and that growth rates appear to lessen according to the age of the CEO.

Keywords: CEO experience; firm growth; family businesses; chief executive officers; CEOs; curvilinear effects; company performance; multiple directorships; added value; CEO age; performance levels; growth rates; successors; Belgium; tenure; Flanders; small and medium-sized enterprises; SMEs; entrepreneurs; entrepreneurship; family firms; financing; corporate governance; succession issues.

DOI: 10.1504/IJESB.2010.035817

International Journal of Entrepreneurship and Small Business, 2010 Vol.11 No.3, pp.242 - 262

Published online: 05 Oct 2010 *

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