Parents’ learning mechanisms for family firm succession: an empirical analysis in Spain through the lens of the dynamic capabilities approach

sustainability Article Parents’ Learning Mechanisms for Family Firm Succession: An Empirical Analysis in Spain through the Lens of the Dynamic Capabilities Approach Natalia Martin-Cruz 1, Ismael Barros Contreras 2,*, Juan Hernangómez Barahona 1and Héctor Pérez Fernández 1 1School of Economics and Management, University of Valladolid, 47002 Valladolid, Spain; [email protected] (N.M.-C.); [email protected] (J.H.B.); hector[email protected] (H.P.F.) 2Department of Management and Industry, Universidad Austral de Chile, Puerto Montt 5480000, Chile *Correspondence: [email protected]; Tel.: +56-652203034 Received: 20 August 2020; Accepted: 30 September 2020; Published: 6 October 2020   Abstract: Succession is a concern for most family firms. The literature has addressed succession in family firms from different perspectives. However, there are still unaddressed questions concerning the microfoundations of succession, and there is a need to secure a better understanding of the succession process and what role parents play therein. Using the dynamic capabilities approach, we shed light on the influence of parents’ behaviors on successors’ intentions. In particular, the paper pursues a twofold aim; first, to analyze the effect of learning mechanisms that parents deliberately use with their children in the family firm on the succession dynamic capability; and second, to explore the impact of this dynamic capability of successor intention to continue in the family firm. We test the model on a sample of potential successors of family firms in Spain. Using partial least squares (PLS) for a sample of 9146 individuals, we confirm the positive impact of the use of parents’ deliberate learning mechanisms on succession dynamic capability and, in turn, the positive effect of the created succession dynamic capability on the successor’s intention to continue the family firm. Furthermore, we find that perceived self-efficacy fails to have any effect on successor intention. Keywords: succession; empirical–quantitative; structural equation modeling; dynamic capability; parents’ learning mechanisms; intentions; family firm 1. Introduction Succession is a worrying issue for family firms [ 1 ]. In fact, the biggest challenge facing family firms’ survival is succession, with most firms having no plans in this regard. In Spain, as in most European countries, the future challenges facing family firms and the main obstacles to generational change have traditionally involved succession planning and professionalization [ 2 ]. However, even though it might seem that the success of the succession will depend on its planning, including the criteria to be met by the successor and how these will be applied, other areas need to be studied for a successful family succession in family firms [3]. Family firm literature has addressed this challenge from different theoretical perspectives, with the focus progressively shifting towards the parents (incumbents). In organizational commitment literature, the succession decision is explained by disentangling the various types of successor commitments and by revisiting the antecedents of each type of commitment using a range of theories and approaches [ 4 ]. Furthermore, the social cognitive theory advances our understanding of the antecedents of successor engagement in family firms by theoretically modeling the impact of parental support and psychological control on successors [5]. Sustainability 2020,12, 8220; doi:10.3390/su12198220 www.mdpi.com/journal/sustainability Sustainability 2020,12, 8220 2 of 17 Adopting institutional logic, Richards et al. [ 6 ] explored the succession dilemma (successor willingness versus their actual ability) by taking the perspective of the incumbent family member, and suggested that incumbents play an important role in terms of their ability to engage skilled successors in the management of the family firm. The social exchange perspective considers incumbent–successor relationships and stresses the importance of the quality of those relationships for transferring knowledge during the nurturing phase of succession [ 7 , 8 ]. The imprinting theory explains how parents transfer their patterns of behavior in the family firm to their children and how a family’s culture can guide family members through a learning process that helps to develop a particular way of thinking [9]. Although some progress has been made in family firm literature, there is still a need to secure a better understanding of the succession process and what role parents play therein. In order to gain deeper insights into these issues, we use the dynamic capabilities approach, which shows the family firm as a bundle of learning mechanisms and dynamic capabilities created across generations [ 10 – 12 ]. From this approach, the parents in the family firm play a role in developing learning mechanisms that will allow successors to forge one of the core dynamic capabilities that can keep the firm within the family [ 13 ]. Parents can create the learning mechanisms for their successors by giving them support [ 5 ], making them committed to the family firm [ 4 ], avoiding any negative imprints [ 9 ], and then making them willing to engage in the family firm. Should they succeed, successors will acknowledge the benefits of continuing the family firm. From the dynamic capabilities approach, we highlight the importance of learning derived from incumbents in the firm. The closeness of the relationships between parents and successors and their simultaneous participation in the family and in the firm’s systems creates a unique context where knowledge and learning occur in an idiosyncratic manner, allowing the creation of parents’ learning mechanisms. The parent–successor relationship contains the specific conditions to integrate and recombine knowledge and to develop emotional and social mechanisms to preserve this knowledge, which then become part of the successors’ specialized knowledge and skills and can enable their engagement with the family firm in the long term and guarantee its sustainability [14]. The aim of this research is to deepen current understanding of what role parents play in successors’ intentions to continue the family business, taking the perspective of the successor’s perceptions. In particular, the study seeks to understand the influence of parents’ learning mechanisms on the succession dynamic capability and, ultimately, on successor intention to become the next generation working in the family firm. Additionally, we control for successor skills, as the literature has suggested that these might influence successor intention. The contributions of this research are twofold. First, we further current knowledge of succession in family firms by using the dynamic capabilities approach in the creation of successor commitment as an antecedent of successor intentions. Second, we present an empirical study in Spain, a country in which succession is a key problem vis-à-vis preserving family capital over time [2]. The remainder of the study is structured as follows. First, we present the theoretical background and hypotheses. We then explain the methodology and results to emerge from the analyses. Finally, we provide the conclusions and offer a discussion of the results. 2. Theoretical Background and Hypothesis Development The dynamic capabilities approach was conceived to explain the sources of firms’ competitive advantages occur over time [ 15 ]. This approach emerged as an alternative to existing theories and frameworks in an effort to understand the new sources of firms’ competitive advantages [ 16 ]. Since its conception, scholars have used it and applied it to identify diverse dynamic capabilities that are relevant to performing in environments that display certain characteristics, avoiding the ‘zero-profit condition’ [10–12]. The distinctive feature of this approach is the concept of dynamic capabilities, and scholars have been challenged to ascertain its underlying microfoundations [ 16 ]. Based on this concept, the approach Sustainability 2020,12, 8220 3 of 17 seeks to provide insights into how to compete in uncertain environments in which firms must exploit their knowledge while creating new knowledge in an effort to adapt, integrate, and reconfigure their internal and external organizational skills, resources, and competences [16]. Dynamic capabilities emerge from learning and constitute systematic methods for modifying operating routines [ 17 ]. Dynamic capabilities are seen as an organization’s capacity to intentionally create, extend, or modify its foundation of resources [ 18 ]. Dynamic capabilities allow a firm to extend, modify, or create ordinary capabilities through access to and recombination of knowledge, thereby enabling success over time [17,19–21]. In family literature, scholars recognize that the way in which dynamic capabilities are generated in family firms may differ due to the particular characteristics of the learning process inherent in these firms [ 22 ]. Because family members are emotionally, economically, and socially attached to the firm, family firms are expected to be able to develop unique and difficult-to-replicate learning mechanisms. There are family learning mechanisms resulting from family practice and experimentation in the firm that can allow strategic management to be effective. In family firms, dynamic capabilities’ orchestration is secured through family learning mechanisms [ 21 ], with such mechanisms proving vital as a pre-requisite for family firm survival [23] (See Figure 1). Sustainability 2020, 12, x FOR PEER REVIEW 4 of 18 develop their capacities to detect, interpret, and act on any future threats or new opportunities that might emerge in the family firm [36]. Family firm members who simultaneously fulfil the function of owner and manager maintain leadership and learning capabilities that make them worthy of being considered entrepreneurial managers and capable of creating lasting learning mechanisms for future generations that can ensure the sustainability of the succession dynamic capability [39,40]. Based on those arguments, we formulate the following hypothesis. H1. Parents’ use of specific deliberate learning mechanisms with successors is positively related to the succession dynamic capability. The ultimate objective of the family firm is its survival, and for that to occur, successors must be willing to be the next generation attached to running the firm. Therefore, successor’s intention to continue the family firm is the first step towards family firm survival. From the dynamic capabilities approach, strong dynamic capabilities are critical to success and survival [41]. In the particular case of family firms and succession, these firms need a strong succession dynamic capability that will allow them to draw on successors who wish to continue the family firm [12,27]. The succession dynamic capability allows successors to deploy their own resources, adjust them as circumstances require, and generate or acquire new ones when needed [42], and allows them to focus on the continuation of the family firm in an effort to preserve company survival. The succession dynamic capability, grounded on successors’ feelings, perceptions, motivations, and commitments, is important vis-à-vis creating succession intention. A successor who has acquired the skill to preserve socioemotional wealth [43] and who understands the importance of noneconomic outcomes displays greater potential to develop transgenerational succession intention [38]. A successor who is able to secure organizational autonomy and entrepreneurial desires can relate to the feelings of readiness for succession [16]. Moreover, dynamic capabilities related to succession are associated with people who possess the abilities to develop better strategic practices [9] and achieve long-term profitability and growth [15]. Based on these arguments, we formulate the following hypothesis. H2. Succession dynamic capability is positively related to succession intention. Figure 1. Shows the research model. 3. Methodology 3.1. Sample and Data Collection Data were collected from the 2018 Global University Entrepreneurial Spirit Students’ Survey (GUESSS), an international research project that investigates the entrepreneurial intentions and activities of students using a geographical and temporal comparison [44–48]. In this case, we use the Spanish version of the questionnaire. The 2018 GUESSS edition investigated and compared entrepreneurial attitudes, intentions, and activities of students at more than 3000 universities from 54 Figure 1. Shows the research model. Learning in the family firm thus allows the bundle of resources and capabilities provided by the family to be linked and dynamic capabilities to be developed. Once family members acquire new knowledge, develop skills, and bring these into the firm, they can be transferred to the other members of the firm [ 12 , 24 ] and transferred across generations [ 25 , 26 ]. Therefore, this specific learning management in family firms recognizes the dynamic component attached to the family’s resources and the family firm’s ability to secure wealth creation across generations [27]. In particular, parents are involved in the immediate (next) generation’s learning about the skills, norms, values, or technical information related to the family firm. Parents act as an active internal stakeholder of successor learning by deliberately guiding them in the family firm learning process [ 6 ]. As do other individuals in a firm, successors build their skills by repeatedly executing similar tasks [ 28 ] and by figuring out what works and what does not when undertaking tasks in the family firm [17]. Grounded on the dynamic capabilities approach, we define parents’ deliberate learning mechanisms as systematic active actions of parents sharing knowledge experience, articulating and codifying family firm knowledge, and preserving the family’s socioemotional wealth so that successors learn to solve problems, improve decision-making, stimulate creative ideals, effectively implement organizational objectives, and then assist in renewing organizational capabilities in the family firm (based on Nelson and Winter [ 29 ]; Clark and Fujimoto [ 30 ]; Teece et al. [ 21 ]; Argote [ 28 ]; Eisenhardt and Martin [20]; Zollo and Winter [17]; Barros et al. [27]). These learning mechanisms—as an example of interaction and mutual trust—allow the family firm’s values and vision to be transferred to successors [ 31 ] and ensure continuity [ 32 , 33 ]. When parents and subsequent generations are involved in management, they exhibit high levels of cohesion and a strong sense of shared purpose [ 34 ]. Moreover, symbols or stories about the family and the family firm that parents share with successors and parents’ valuable dedication to the firm are elements of the learning process [ 9 , 35 ]. In fact, by using these mechanisms, parents are building a succession dynamic Sustainability 2020,12, 8220 4 of 17 capability that is strongly anchored in the family firm’s culture, shared values, experimentation, and so on [ 36 ]. Following Zollo and Winter’s [ 17 ] definition of a dynamic capability, we define succession dynamic capability as a learned and stable pattern of succession feelings, perceptions, motivations, and commitments through which the family firm systematically generates and modifies its operating routines in pursuit of family firm survival. Balanced family structures have a positive influence on the family business over time, meaning that when family systems are connected and flexible in family firms, the succession plans prove more effective [ 37 ]. Because a learning organization must enable the rapid dissemination of new knowledge laterally and vertically [ 36 ], families that balance stability and change, while at the same time working together in a democratic style and sharing roles, might be more able to better create a balanced commitment to the family firm [ 38 ]. Parents use their leadership skills to help successors develop their capacities to detect, interpret, and act on any future threats or new opportunities that might emerge in the family firm [36]. Family firm members who simultaneously fulfil the function of owner and manager maintain leadership and learning capabilities that make them worthy of being considered entrepreneurial managers and capable of creating lasting learning mechanisms for future generations that can ensure the sustainability of the succession dynamic capability [ 39 , 40 ]. Based on those arguments, we formulate the following hypothesis. H1. Parents’ use of specific deliberate learning mechanisms with successors is positively related to the succession dynamic capability. The ultimate objective of the family firm is its survival, and for that to occur, successors must be willing to be the next generation attached to running the firm. Therefore, successor’s intention to continue the family firm is the first step towards family firm survival. From the dynamic capabilities approach, strong dynamic capabilities are critical to success and survival [ 41 ]. In the particular case of family firms and succession, these firms need a strong succession dynamic capability that will allow them to draw on successors who wish to continue the family firm [12,27]. The succession dynamic capability allows successors to deploy their own resources, adjust them as circumstances require, and generate or acquire new ones when needed [ 42 ], and allows them to focus on the continuation of the family firm in an effort to preserve company survival. The succession dynamic capability, grounded on successors’ feelings, perceptions, motivations, and commitments, is important visà -vis creating succession intention. A successor who has acquired the skill to preserve socioemotional wealth [ 43 ] and who understands the importance of noneconomic outcomes displays greater potential to develop transgenerational succession intention [ 38 ]. A successor who is able to secure organizational autonomy and entrepreneurial desires can relate to the feelings of readiness for succession [ 16 ]. Moreover, dynamic capabilities related to succession are associated with people who possess the abilities to develop better strategic practices [ 9 ] and achieve long-term profitability and growth [15]. Based on these arguments, we formulate the following hypothesis. H2. Succession dynamic capability is positively related to succession intention. 3. Methodology 3.1. Sample and Data Collection Data were collected from the 2018 Global University Entrepreneurial Spirit Students’ Survey (GUESSS), an international research project that investigates the entrepreneurial intentions and activities of students using a geographical and temporal comparison [ 44 – 48 ]. In this case, we use the Spanish version of the questionnaire. The 2018 GUESSS edition investigated and compared entrepreneurial attitudes, intentions, and activities of students at more than 3000 universities from 54 countries. The questionnaire was active from 5 October 2018 to 23 December 2018. In total, 76 Spanish universities participated in GUESSS. Students at the various universities received an e-mail with an invitation Sustainability 2020,12, 8220 5 of 17 to participate in a study on their ‘future career choice’, together with a link to the online survey. This method can be considered suitable to reach students at different universities [ 49 ]. In addition, student samples are adequate for entrepreneurial intention research [50]. In Spain, the number of students contacted was 1,537,591 and the valid response rate was 2.2%. In total, 33,278 student responses were collected. Since we are studying succession intention in this research, we are only interested in students whose parents are self-employed and/or a majority owner of a business. The final sample size was, therefore, 9146 students. Of these, the average age is 22.5 years, and 57.6% are female. These students belong to different fields of study—mainly to engineering (20.6%), business/management (18.5%), and social sciences, such as education, politics, and psychology (15.0%). 3.2. Variables and Measures All of the measures used in this paper were collected from the GUESSS questionnaire answered by university students. The scales are seven-point Likert scales for all the variables. Below, we explain the measures for each of the dependent and independent variables (Table 1). Table 1. Construct operationalization. Construct Sources Operational question Instrumental assistance My parents: Inas1 Talked to me about how what I am learning will someday be able to help me in their business. Inas2 Taught me things that I will someday be able to use in their business. Inas3 Gave me chores that taught me skills I can use in my future career in their business. Turner et al. (2003) Career-related modeling My parents: Camo1 Told me about the kind of work they do at their business. Camo2 Told me about things that happen to them at their business. Turner et al. (2003) Camo3 Have taken me to their business. Verbal encouragement My parents: Veen1 Encouraged me to learn as much as I could at school. Veen2 Encouraged me to make good grades. Turner et al. (2003) Veen3 Told me they are proud of me when I did well in school. Emotional support My parents: Emsu1 Talked to me about what fun my future job in their business could be. Emsu2 Said things that made me happy when I learned something I might use in their business. Turner et al. (2003) Emsu3 And I get excited when we talk about what a great job I might have someday in their business. Affective commitment Afco1 I feel as if my parents’ business’s problems are my own. Afco2 I feel a sense of belonging to my parents’ business. Afco3 I would be very happy to spend the rest of my career with my parents’ business. Dawson et al. (2015) Afco4 I feel emotionally attached to my parents’ business. Afco5 My parents’ business has great personal meaning for me. Normative commitment Noco1 I feel an obligation to my family to pursue a career with my parents’ business. Noco2 My parents’ business deserves my loyalty. Dawson et al. (2015) Noco3 I would feel guilty if I did not pursue a career with my parents’ business. Noco4 I owe a great deal to my parents’ business. Succession intention Suin1 I am ready to do anything to take over my parents’ business. Suin2 My professional goal is to become a successor in my parents’ business. Suin3 I will make every effort to become a successor in my parents’ business. Linan & Chen (2009) Suin4 I am determined to become a successor in my parents’ business in the future. Suin5 I have very seriously thought of taking over my parents’ business. Suin6 I have the strong intention to become a successor in my parents’ business one day. Succession intention: GUESSS uses six items adapted from Liñ á n and Chen [ 51 ] concerning whether students are ready to, intend to, or are determined to be the successor of their parents’ Sustainability 2020,12, 8220 6 of 17 businesses. Students are asked to answer different questions, such as the extent to which they agree with different statements related to succession. Parents’ learning mechanisms: For these variables, GUESSS employs the Career-Related Parent Support Scale of Turner et al. [ 52 ], adapting it for family firms. This scale contains four different groups of items: (1) Instrumental assistance (three items); (2) career-related modeling (three items); (3) verbal encouragement (three items); (3) emotional support (three items). Students were asked to answer different statements related to how much they agree with their parents’ behavior towards them while they were growing up. Succession dynamic capability: As previously mentioned, succession dynamic capability depends on the different succession feelings, perceptions, motivations, and commitments of successors. In this way, succession dynamic capability is operationalized with two different types of commitment: affective and normative. The affective commitment scale consists of five items related to the sense of belonging and to individuals’ feelings of being emotionally attached to their parents’ family firms. Normative commitment consists of four items concerning individuals’ obligation to follow their family firms [ 4 ]. Students are asked to respond to different statements in terms of how much they agree with each of them. Table 1shows the operationalization constructs and their sources. 3.3. Control Variables and Common Method Bias We introduce different variables as control variables. First, we use gender, since prior studies show that, compared to women, men have a higher preference for entrepreneurial behavior [ 53 – 56 ]. We operationalized this with a dummy variable (Male =0; Female =1). Second, self-efficacy refers to individuals’ perception of whether they either do or do not possess the capabilities to successfully engage in entrepreneurial behavior [ 57 ]. Previous studies in entrepreneurship consider self-efficacy as an important predictor of entrepreneurial intention [ 58 , 59 ], such that we control for this variable. GUESSS adapts previous entrepreneurial self-efficacy scales [ 59 , 60 ] to skills that are more related with the tasks and roles involved in family firms. In particular, GUESSS operationalizes self-efficacy with eight items related to conflict management and to maintaining healthy relationships with family members, employees, and other stakeholders. Lastly, as the final sample is composed of students from different fields of study, we include two dummy variables to control fields of study. In particular, we include a dummy variable for students of engineering or computer sciences/IT (1 =engineering or IT fields; 0 =any other field) and a dummy variable for students of humanities and arts (1 =humanities or arts; 0 =any other field). Previous research shows that students from different fields have different entrepreneurial intentions, attitudes, or behaviors [61–64]. Common method bias is a serious concern when the same individual answers perceptual measures related to dependent and independent variables [ 65 ]. In order to assess the severity of common method bias, we conduct a Harman one-factor test [ 66 ] with our seven main variables. This test checks whether data variance is mainly attributed to a single factor. We adopt the rule of an eigenvalue of greater than one and find four factors. The highest covariance explained by one factor is only 26.6%. We thus confirm that common method bias is not a concern. 3.4. Method of Analysis We use structural equation modeling (SEM) for our statistical analysis. In particular, we employ the partial least squares (PLS-SEM) approach. PLS-SEM is increasingly being used in the research fields of administration research, strategy, and marketing [ 67 – 70 ], as well as in family firms [ 71 – 74 ]. Recent studies stress the usefulness of the PLS-SEM model as a research tool in the field of family firms [ 75 , 76 ]. Following PLS-SEM, the measurement and structural parameters are estimated via an iterative procedure that combines simple and multiple regressions. This avoids any distributional assumption of the observed variables. Consequently, PLS-SEM does not require data normality and does not suffer from the indeterminacy problems associated with other modeling techniques [ 77 ]. Sustainability 2020,12, 8220 7 of 17 In addition, we choose PLS-SEM because it can handle both reflective and formative constructs [ 78 ], added to which it allows both first-order and second-order constructs to be modelled. All first-order constructs are reflective. We model the parent learning mechanism as a second-order construct in a reflective–formative way. 4. Results 4.1. Measurement Model The measurement model presents the parameters associated with the constructs, and they are all reflective constructs. In PLS-SEM, the reflective indicators are determined by the construct and are covariate at this level [ 79 ]. The measurement model is evaluated by studying the reliability of each item and the internal consistency, as well as the convergent validity (Table 2) and discriminant validity (Table 3) [80]. Table 2summarizes the parameters of the measurement model. Table 2. Latent variable, items’ measures, composite reliability, average variance extracted (AVE), and Cronbach’s Alpha. Construct/Indicator Factor Loading t-Statistic Composite Reliability AVE Cronbach’s Alpha Instrumental assistance 0.931 0.819 0.889 Inas1 0.862 245.035 Inas2 0.930 527.440 Inas3 0.921 466.122 Career-related modeling 0.939 0.836 0.902 Camo1 0.929 443.763 Camo2 0.935 511.987 Camo3 0.878 222.072 Verbal encouragement 0.920 0.793 0.870 Veen1 0.892 195.973 Veen2 0.910 215.001 Veen3 0.869 198.934 Emotional support 0.934 0.826 0.895 Emsu1 0.913 399.114 Emsu2 0.902 372.258 Emsu3 0.912 397.549 Affective commitment 0.917 0.689 0.887 Afco1 0.730 122.656 Afco2 0.863 254.478 Afco3 0.785 187.367 Afco4 0.892 339.628 Afco5 0.870 294.206 Normative commitment 0.895 0.684 0.841 Noco1 0.905 427.959 Noco2 0.857 228.468 Noco3 0.884 306.890 Noco4 0.634 85.002 Succession intention 0.975 0.868 0.969 Suin1 0.876 214.493 Suin2 0.946 464.376 Suin3 0.958 570.326 Suin4 0.957 567.014 Suin5 0.902 253.924 Suin6 0.947 425.265 Sustainability 2020,12, 8220 8 of 17 Table 3. Inter-construct correlations and average variance extracted (AVE). Construct 1 2 3 4 5 6 7 1. Instrumental assistance 0.905 2. Career-related modeling 0.515 0.914 3. Verbal encouragement 0.110 0.369 0.890 4. Emotional support 0.662 0.297 0.081 0.909 5. Affective commitment 0.564 0.345 0.052 0.548 0.830 6. Normative commitment 0.564 0.301 − 0.014 0.550 0.739 0.827 7. Succession intention 0.457 0.183 − 0.064 0.505 0.622 0.666 0.931 The elements in the diagonal belong to the root of the AVE. The internal reliability of each item is determined by item loadings and is expressed as the percentage of the variance of the item relative to the construct. In order to obtain good item reliability, the load must be greater than 0.7 [ 81 ]. All loadings are above 0.7, with the exception of one normative commitment construct, which has loads close to 0.6, a measurement still deemed acceptable [82]. The internal consistency of the constructs is evaluated by determining Cronbach’s Alpha and composite reliability. The indicators exceed 0.8 for Cronbach’s Alpha and 0.8 for composite reliability, indicating that both measurements are acceptable [ 83 ]. The convergent validity of the construct is expressed in the degree that all the items in a construct are measured by the same concept and is evaluated by examining the average variance extracted (AVE). In our analysis, the AVE indicator exceeds 0.6, as recommended by Fornell and Larcker [84]. Discriminant validity is evaluated by examining the degree to which the root of the AVE is higher than the co-related inter-construct. Table 3shows this relation. In sum, the tests show that all the indicators display reasonable measurement properties. As stated, we treat the variable parents’ learning mechanism as a second-order construct with a formative nature. We examine how significant the contribution of each dimension is to the second-order construct. Following Becker et al. [ 85 ], we use the repeated indicator approach to estimate the measurement models for instrumental assistance, career-related modeling, verbal encouragement, and emotional support. Table 4shows that the outer weights of all the facets that belong to parents’ learning mechanisms are significant, confirming that the fit of the formative measurement models is good. We then check for multicollinearity using the variance inflation factor. The values of the respective dimensions are below the cut-offvalue of 5, indicating no collinearity concerns. Table 4. Quality criteria of second-order measurement. Formative Second-Order Construct Facets/Components Outer Weights VIF Parent learning mechanisms Instrumental assistance 0.448 ** 2.248 Career-related modeling 0.315 ** 1.585 Verbal encouragement 0.082 ** 1.171 Emotional support 0.426 ** 1.792 Bias-corrected bootstrap significance levels: ** p<0.01 (one-tailed test); VIF =variance inflation factor. 4.2. Structural Model We use Smart PLS 3.0 to validate our model by bootstrapping 1000 randomly generated subsamples to determine the significance of the Beta coefficients (β). Table 5shows the results. Table 5shows that parent learning mechanisms positively and significantly influence succession dynamic capability, with a coefficient of 0.600 (t=77.058) (affective commitment) and a coefficient of 0.582 (t=72.788) (normative commitment). These results provide evidence of the direct impact of parent learning mechanisms through parents’ knowledge transfer on potential successors in family firms. Parents are able to forge succession dynamic capabilities by stimulating successors’ affective Sustainability 2020,12, 8220 9 of 17 and normative commitment, and by creating lasting learning mechanisms for future generations, they ensure the succession dynamic capability [39,40]. These results support H1. Table 5. Standardized parameter estimates. Hypotheses Path Coefficient t-Value Outcome Parent learning mechanisms→Succession dynamic capability (Affective commitment) 0.600 77.058 * H1 Supported Parent learning mechanisms→Succession dynamic capability (Normative commitment) 0.582 72.788 * Succession dynamic capability (Affective commitment)→ Succession intention 0.281 20.804 * H2 Supported Succession dynamic capability (Normative commitment) → Succession intention 0.451 33.371 * Control relationships Gender→Succession intention −0.042 5.233 * Self-efficacy→Succession intention 0.003 0.481 Engineering/IT→Succession intention −0.003 0.415 Humanities/Arts→Succession intention −0.032 4.688 * R2of Succession Intention 0.483 R2of Affective Commitment 0.360 R2of Normative Commitment 0.338 *p<0.01. In addition, Table 5summarizes the results that support H2. Succession dynamic capability (affective and normative commitment) positively and significantly affects the succession intention, with a coefficient of 0.281 (t=20.804) (affective commitment) and a coefficient of 0.451 (t=33.371) (normative commitment). These results confirm that succession dynamic capability, grounded on the succession feelings, perceptions, motivations, and commitments of successors, proves relevant visà -vis creating the succession intention and, therefore, granting family firm survival for at least one more generation. The study includes different variables as control variables. Only gender and students’ study area (humanities and arts) were found to be significant with regard to succession intention, with a coefficient of − 0.042 (t=5.233) and a coefficient of − 0.032 (t=4.688), respectively. These results suggest that gender (male/female) affects succession intention. The negative coefficient implies that females display less intention to continue in the family firm than males. This finding is in line with previous empirical and theoretical research [ 53 – 56 ]. As regards the field of study, humanities and arts students exhibit less intention to continue the family firm than students from other disciplines. In previous research, results show that students from these specific fields display less entrepreneurial intention than the rest [ 61 – 64 ]. As for the perceived self-efficacy variable, the results fail to show any effect on successor intention. This is also an interesting result, since the successor’s locus of control, or their perceived lack of marketable skills, has been considered in the literature as playing a role in succession intention [86,87]. Finally, we state that the structural model evaluation displays good predictive qualities, weight, and size of variables and relationships. 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