Condition model for transferring social capital in family business succession

The importance of family businesses to the economic systems of most countries emphasizes the need to support further development of succession process. European Commission has recently reported that an estimated one third of EU entrepreneurs, mainly those running family enterprises, will withdraw within the next ten years, which affects some 610 000 firms and 2.4 million jobs every year (2004). Most theorists agree that the continuity of businesses from one generation to the next depends highly on succession planning (Handler, 1990). What has not been as closely examined is the process of transferring social capital from one family member to another, existing literature on succession planning focusing largely on the transfer of physical and human capital (Steier, 2001). In an effort to bridge this gap, we attempt to identify the major conditions by which social capital is efficiently transferred in family businesses succession.