External Entrepreneurial Performance: Its Effect on the Succession Intentions of Next-Generation Family Entrepreneurs

Next-generation family members (NGFMs) who manage successful ventures outside the family firm may be potential successors. However, if these NGFMs continue with their external endeavor instead of joining and taking over the family firm, the family firm will take the loss. Few studies have focused on this group of NGFMs and their succession intentions. Drawing on theory of planned behavior and a conjoint experiment with 87 NGFMs with external entrepreneurial experience, we find that while a push and negative relationship exist between NGFMs’ external venture performance and succession intentions, high knowledge, skill, and ability (KSA) relevance, incumbents’ support, and good family firm performance pull NGFMs back. These three factors strengthen the negative correlation between external venture performance and succession intentions. Our study contributes to family business succession research and offers practical implications for family firm incumbents.