The importance of specific human capital, planning and familiarity in Dutch small firm ownership transfers

This study focuses on the transfer process and the importance of human capital and succession planning as firm resource from the seller’s perspective. It further differentiates amongst two types of human capital - specific and generic - to predict the transfer duration, obtained price and satisfaction with the transfer. A representative dataset of 112 Dutch small firm owners, who sold their firm in 2005 and 2006, is analyzed. Hierarchical multiple regressions show that specific human capital, like flexibility, social skills and market awareness predict transfer performance better than generic human capital like general education. Results also indicate that succession planning in business transfers is unrelated to the objective transfer performance indicators transfer duration and obtained price. Succession planning is strongly related to the subjective transfer performance indicator satisfaction. Results also show that familiarity between seller and buyer rather than kinship or family ties is a key predictor for all transfer performance indicators.