Academic research

 This paper analyzes the emergence, succession, and performance of the first-generation family firms in Latvia. Key findings include: 44% of founders did not hold a majority stake initially but achieved it within 7 years. Only 16% of firms transitioned to second-generation owners within 23 years. About 80% remain founder-owned and managed. Family firms outperform nonfamily firms by 3.1% in ROA, consistent with prior studies. Most enterprises face imminent succession, highlighting the need for policy awareness and succession planning support. 

 The survey reveals that Baltic family firm owners are eager to pass their businesses to the next generation. Nine out of ten Lithuanians, nearly as many Latvians, and eight out of ten Estonians share this desire. However, preparedness varies. When asked if they have a successor being prepared for management, 69% of Latvian respondents, half of Estonians, and only 37% of Lithuanians answered yes, with successors almost exclusively from family members.  

Altogether, 302 respondents took the survey (114 from Latvia, 99 from Estonia and 89 from Lithuania). 

Family business owners in Latvia are aware of the succession, but do not treat it as a systematic process. They are treating process factors as a succession and encouraging competence for successors, however disregarding other individual factors, as well as relation, financial and context factors. While the lack of knowledge about succession planning calls for education of family business owners, absence of a legal framework for family foundations is preventing succession planning and effective family business succession in Latvia.

 This study analyzes the impact of Covid-19 on family firm performance in Estonia, Latvia, and Lithuania. While family firms demonstrate better performance (return on assets) in all three countries, Latvian and Lithuanian family firms perform better during the crisis. The study also finds that 82% of the largest 200 family firms in Latvia are still owned by their founders, indicating that generational ownership change is happening very slowly. 

The results show that family firms constitute more than 30% of all the firms (with above 2 MEUR revenues) and they are associated with significantly higher performance (return on assets and return on equity) than non-family firms during the time period 2012-2020.