Transgenerational Succession’ Effects on Financial Performance of Listed Family Firms in the Arab Countries

The purpose of this paper is to study the impact of succession events on the level and determinants of the financial performance of family businesses in the Arab world. This research is conducted through an empirical study on a sample of 166 family businesses in the Arab world. Firstly, the paper compares the financial performance of family businesses that continue to be managed by the founders with family businesses in which the management has been transferred to the successors. Secondly, this research identifies the determinants of the financial performance of the two categories through a multifactorial model based on the panel data method. The results revealed that succession negatively impacts the seizing of opportunities and growth in the market in the context of family businesses in the Arab region. Moreover, the paper clarifies the prudent policy that characterizes the transmitted family businesses, through the accumulation of resources and underinvestment. In this sense, this research provides evidence that family wealth and business affairs are interrelated in the tradition of clientelism, which is reflected in Arab countries by the transmission of family businesses to family successors. In other words, succession to inheritors is inevitable in the Arab context, and family businesses may show contradictory performances and stagnate, compared to first-generation family businesses

FINANCIAL HEALTH OF MOROCCAN UNLISTED FAMILY BUSINESSES: EXPLANATION BY EMOTIONAL AND SOCIAL DYNAMICS

This paper aims to explore the effect of socio-emotional wealth on the financial health of Moroccan unlisted family businesses. Building on the theory of socioemotional wealth, this research is a first attempt to provide a better understanding of this phenomenon by analyzing how the non-financial prerogatives of family members are likely to affect the financial health of Moroccan family businesses. To arrive at the results, we conducted this study through exploratory qualitative research using semi-structured interviews with 19 managers of Moroccan unlisted family businesses. The results obtained seem to confirm that the non-financial logic adopted by family members can deteriorate the financial situation of family firms, as they feel less concerned about liquidity, profitability, and solvency objectives and prefer to make decisions that minimize socioemotional losses at the expense of better financial health