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How Much am I Expected to Pay for my Parents‘ Firm? An Institutional Logics Perspective on Family Discounts

By Thomas Zellweger, Melanie Richards, Philipp Sieger and Pankaj Patel

Abstract

Recent evidence suggests that successors do not simply inherit their parents’ firm, but have to pay a certain price. Building on institutional logics literature, we explore successors’ family discount expectations, defined as the rebate expected from parents in comparison to nonfamily buyers when assuming control of the firm. We find that family cohesion increases discount expectations, while successors’ fear of failure and family equity stake in the firm\ud decrease discount expectations. Higher education in business or economics weakens These effects. On average, in our study comprised of 16 countries, successors expect a 57% family discount

Topics: 330 Economics, 650 Management & public relations
Publisher: Wiley
Year: 2016
DOI identifier: 10.1111/etap.12161
OAI identifier: oai:boris.unibe.ch:84178
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