Abstract

SAN MARTIN REYNA, Juan Manuel  and  DURAN ENCALADA, Jorge Alberto. Succession and its relationship with debt and performance in family business. Contad. Adm [online]. 2016, vol.61, n.1, pp.41-57. ISSN 0186-1042.  https://doi.org/10.1016/j.cya.2015.09.005.

In addition to making decisions about issues that affect all companies, family business must be able to adequately manage the company-family relationship through an examination of the dynamics that involve founders, successive generations, shareholders and the firm. It is therefore important to develop skills to identify and resolve difficulties raised by these relationships, and adopt strategies to promote growth, share power and control, seeking to create value for the company. Thus why this paper analyzes the effect of succession on the financial and capital structure of family firms. Based on a sample of Mexican public companies during the 2005-2011 period, we find that the effects of succession on financial performance varies depending on the generation that leads the company. We find that second-generation family businesses are characterized by greater risk aversion to indebtness and are more conservative compared with third-generation family business, characterized by a greater preference for financing through debt.

Keywords : Succession; Debt; Firm value; Family business.

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