Heir to the Throne: Perceived Child-successors’ Willingness and Parent-incumbents’ Corporate Philanthropy in Family Firms

Abstract The behavior of parent-incumbents depends not only on their own intention to hand over the family firm but also on their child-successors’ willingness to take over. Drawing on socioemotional wealth (SEW) theory, we develop a model of the impact of perceived child-successors’ willingness on parent-incumbents’ corporate philanthropy prior to succession. We argue that perceived child-successors’ willingness increases parent-incumbents’ transgenerational succession anticipation and the resulting desire to preserve SEW, which in turn motivates them to engage more in corporate philanthropy. However, parent-incumbents facing a greater threat of state expropriation engage less in philanthropy, as they anticipate a lower likelihood of successful transgenerational succession. Using data from a national survey of Chinese family firms, we find support for our hypotheses. Our findings highlight the significance of internal succession anticipation and its interplay with the external institutional environment in shaping family firm philanthropy.