Does the Birth Order of Descendant CEO Sons Impact Family Firm Performance?

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3486432433_413fe29886_zFor most family businesses, the transition of leadership from one generation to the next can be a complex period to navigate. For family business researchers, generational transitions present a multi-faceted research subject with a clear impact on family firm performance. In a recent paper published by Family Business Review entitled “Not All Created Equal: Examining the Impact of Birth Order and Role Identity Among Descendant CEO Sons on Family Firm Performance”, authors Mark T. Schenkel, Sean Sehyun Yoo, and Jaemin Kim explore how seemingly small factor, namely the birth order of a descendant CEO, can have a noticeable effect on family firm performance. The abstract for the paper:

This study extends the family firm performance literature by focusing on birth order differences among descendant CEOs. Data collected from a sample of Korean family firms yield three insights. First, descendant birth order is directly associated with differences in the distribution of control through ownership, leadership (i.e., CEO), and the incorporation of outside board participation and governance. Second, descendant birth order also moderates the relationship between outside block Current Issue Coverholdings and firm performance. Third, we find evidence suggesting that because of firm performance differences, first-son descendant CEOs may find themselves more often replaced over time.

You can read “Not All Created Equal: Examining the Impact of Birth Order and Role Identity Among Descendant CEO Sons on Family Firm Performance” from Family Business Review free for the next two weeks by clicking here.

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*Koreatown image attributed to 2ndeye (CC)

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