Author(s): Nojoud Habash
Family businesses are the backbone of the Palestinian economy where the 'family factor,' which distinguishes family firms from their non-family counterparts, can be exploited to a business's competitive advantage if properly utilized. However, due to the high extinction rate through generations, it is vital to consider succession as a priority by their owners. Relying on the relay race model, the study sheds light on the critical factors of successful succession among Palestinian family businesses to go beyond the analysis performed on family businesses in the Arab countries and specifically in Palestine and to make an essential contribution in explaining family business succession. The study surveyed 282 family businesses, of which 42% are run by 2nd & 3rd generations. Data was collected via a self-administrated questionnaire and analyzed through principal components factor analysis and multiple regression model. Findings reveal that family bonding and family trust in the successor, qualifications and capabilities of the successor are the key drivers to successful succession.