From Parents to Progeny: Entrepreneurial Self-Efficacy, Resilience, and Family Firm Succession

Abstract

This study examines how parental leadership, entrepreneurial self-efficacy, and entrepreneurial resilience—viewed through social capital theory—shape intentions around family business succession in Saudi Arabia. It also investigates the moderating role of the presence of older siblings, exploring how family dynamics affect the transfer of social capital and the likelihood of succession. This research employs structural equation modeling to analyze data from 522 respondents in Saudi Arabia. Entrepreneurial self-efficacy emerges as a key factor in shaping intentions around family business succession, highlighting the importance of psychological resources in this process. The moderating analysis shows that the presence of older siblings weakens the impact of parental guidance and entrepreneurial traits on intentions around family business succession, possibly due to competition among siblings for leadership roles in the family firm. These findings underscore the need for family businesses to strategically manage the distribution of social capital, especially in households with multiple siblings. Initiatives that enhance entrepreneurial self-efficacy and resilience can improve preparedness for succession. Moreover, addressing sibling rivalry through structured succession planning and conflict resolution mechanisms is essential for maintaining business continuity in the Saudi context. Based on social capital theory, this research offers a new perspective on how a family’s resources, networks, and relationships influence intentions around family business succession. Emphasizing the moderating role of sibling dynamics provides useful insights into managing family business transitions in Saudi Arabia, where family ties and social capital are vital.

1. Introduction

Family businesses (FBs), which are led and controlled by certain family members in a given context, are—like other types of companies—considered a significant element in the growth and development of the economy. FBs contribute significantly to the global economy, accounting for about two-thirds of all businesses worldwide and 70–80% of the annual GDP and employment (Ahmad, 2020; Liu et al., 2024). FBs also contribute positively to generating wealth and gains (Alshibani & Aljarodi, 2024). Despite playing a part in the development of the global economy, FBs still encounter several challenges, including succession. Most FBs lack planning for how to transfer the control of their business from one generation to another or organized approaches for executing the transfer plan, which risks their survival and continuity (Bozer et al., 2017; Chua et al., 2003; Fang et al., 2015; Santarelli & Lotti, 2005).

Findings from previous research on FB succession revealed that only about 30% of FBs are anticipated to survive the first generation, approximately 15% are expected to survive their first generation, and less than 3% are anticipated to continue to the fourth generation (Alshibani et al., 2025). FBs’ most significant difficulty appears to be the selection of a successor who will safeguard the business and ensure its continuity and sustainability (Liu et al., 2024), as well as the low interest and intention of successors in FBs (Garcia et al., 2019). According to Sieger et al. (2016), less than 10% of FB members intend to continue or succeed with their family businesses, with the majority planning to become self-employed, highlighting an essential potential FB crisis (Garcia et al., 2019).

These facts make FB succession a critical issue that needs to be discussed and investigated to understand key factors that contribute positively to smooth business succession, especially as academic research on FBs is still in its initial stages, with a standardized definition of FBs being absent in the literature (Birdthistle & Hales, 2023). Understanding the key factors that motivate individuals to succeed in their family businesses, especially potential entrepreneurs (students), is vital, as this allows for continuity and sustainability in FBs, especially with the limited knowledge that is available on successors’ intentions, engagement, and interest in FB succession (Garcia et al., 2019). It is important to note that the willingness of successors to take over business ownership, control, and management is important. If it is missing, an FB will face challenges in sustaining and continuing operations (Liu et al., 2024).

Key factors motivating successors to succeed in their FB include entrepreneurial resilience (ER), entrepreneurial self-efficacy (ESE), and family support and guidance (Liu et al., 2024; Shanine & Combs, 2023). Parental influence and guidance provide a transparent and supportive environment for their kids, preparing them for succession and improving family transitions. Different types of guidance styles may produce different results and motivate or demotivate children’s intention to succeed in the FB. It may also influence successors’ psychological functioning, behavior, and overall performance in the FB (Shanine & Combs, 2023). Furthermore, individuals possessing high levels of ER and ESE can achieve tremendous entrepreneurial success and business intention continuity (Hlatywayo et al., 2017). Psychological capital, in general, can also contribute to entrepreneurial intention (EI) (Hlatywayo et al., 2017).

This argument is also supported by the concept of social capital theory (SCT), suggesting that social networks and relationships are significant for shaping the behavior of individuals and directing their attitude; they encompass different resources that an individual can use and benefit from for various purposes, such as increasing trust, obtaining needed information and knowledge, and understanding obligations (Coleman, 1988). In FBs, parents who maintain close relationships with their children tend to share knowledge and resources, socialize with them, and provide emotional support, which enhances the children’s entrepreneurial activities, skills, and capabilities, ultimately strengthening their succession intentions (Arregle et al., 2007). People with greater resilience can deal much more effectively with adversity and pressure {Formatting Citation}. Still, little is known about how ER, ESE, and parents’ influence or leadership and succession intention interact to impact potential entrepreneurs (students), especially in developing countries (Romaní et al., 2022) and more specifically in the context of Saudi Arabia and the Middle East and North Africa (MENA) region in general (Alshibani & Aljarodi, 2024).

Furthermore, there are limited investigations on the influence of siblings on succession intentions in FBs, especially given the belief that siblings tend to compete with each other for the leadership of the family business, which may affect the members of the family and the business itself (Jayantilal et al., 2016). How parental leadership influences successors’ intentions in FBs still requires more focus and attention in academia, as shown by Coffie et al. (2024), especially with the belief that parents have an important role in instilling knowledge, skills, and other essential qualities for successful business leadership (Shanine & Combs, 2023). FBs in the MENA region contribute positively to reducing unemployment, growing economies, and maximizing GDPs (Alshibani & Aljarodi, 2024; Jahmurataj et al., 2023).

The importance of FBs has been noticed by many states, including Saudi Arabia, a rapidly developing country undergoing a significant change in its economy through the establishment of a long-term plan, the Saudi 2030 vision, with the aims of empowering Saudi citizens, diversifying the economy, attracting external investments, and becoming a global leader. FBs in Saudi Arabia receive attention in this plan, and accordingly, necessary support and help are provided for family businesses operating in the country. FBs in make up about 63% of the Saudi private sector and contribute to creating new job opportunities and reducing unemployment (KPMG, 2023). Still, despite the anticipated positive contribution of FBs to the country, they face significant challenges, including intergenerational dynamics and the transfer of leadership from one generation to the next (KPMG, 2023). Many Saudi family businesses have limited experience with ownership succession, as most were established around the 1960s (KPMG, 2023). As a result, discussions about succession planning are often postponed or avoided. In particular, initiating such conversations during the parents’ lifetime is frequently seen as culturally inappropriate, as it may imply a lack of respect or premature anticipation of their passing (KPMG, 2023). This sensitivity is rooted in deeply held family values emphasizing reverence and gratitude toward elders, rather than being a rejection of planning or business continuity. Accordingly, succession is often treated as a delicate and highly context-dependent topic, requiring thoughtful and respectful engagement within the cultural framework.

The transfer of family businesses (FBs) in most Arab countries, including Saudi Arabia, often occurs without adequate preparation, making succession, continuity, and sustainability critical challenges (Alshibani & Aljarodi, 2024; KPMG, 2023). In this context, it is essential for Saudi Arabian FBs to identify and examine the factors that can facilitate a smooth transition of leadership and ensure long-term stability—an area that has been largely overlooked in prior scholarship (Pribadi & Agustiawan, 2021). Key determinants, such as parental guidance, effective leadership, entrepreneurial resilience (ER), and entrepreneurial self-efficacy (ESE), play a pivotal role in shaping successors’ intentions to assume responsibility for the enterprise (Hlatywayo et al., 2017; Sieger et al., 2016).

Accordingly, this study addresses a gap in the existing literature and responds to calls from prior scholars to further investigate the key determinants of family business (FB) succession. It does so by examining a unique sample of students in Saudi Arabia, a group that has not previously been studied in this context, who are considered potential entrepreneurs and who typically face the challenge of making critical future career decisions (Ljubotina & Vadnjal, 2018). To this end, this study employs social capital theory (SCT) to investigate the influence of parental leadership in the family business (PL-FB) on succession intentions within Saudi family businesses. The model further incorporates the mediating roles of entrepreneurial self-efficacy (ESE) and entrepreneurial resilience (ER), as well as the moderating effect of the presence of siblings.

This study provides theoretical grounding for and empirical evidence on the key factors that enhance the intention to succeed in FBs among Saudi students. It also provides recommendations for policymakers in Saudi Arabia on developing strategies for supporting FBs and their successors in Saudi Arabia and providing them with an adequate environment. This article is organized as follows: The theoretical background and development of hypotheses are presented after the introduction. These are followed by the research methodology, data analysis and interpretation, discussion, implications, and conclusions.

2. Theoretical Framework

This study is based on the social capital theory (SCT) developed by Coleman (1988). The SCT proposes that social networks and relationships are significant for shaping people’s behavior and directing their attitude; they encompass different resources that an individual can use and benefit from for various purposes, such as increasing trust, obtaining needed information and knowledge, and understanding obligations. In this study, SCT provides a foundation for our proposed model and its relationships. FBs with strong ties and close social relationships tend to provide a suitable environment for sharing knowledge and resources, socializing, and providing emotional support to enhance entrepreneurial activities and strengthen successors’ skills and capabilities, which finally leads to a stronger intention in the next generation to succeed in their family business (Arregle et al., 2007). More precisely, successors in FBs with better social capital tend to develop a higher level of self-efficacy, obtained through guidance and mentoring in the FB, and higher levels of confidence, trust, and skills, which motivate them to lead their family businesses in the future. Furthermore, parental leadership also acts as a mechanism transmitting knowledge, skills, and values, which enhances successors’ intention to succeed and allows them to overcome any future challenges and obtain a higher level of resilience (Luthans & Ibrayeva, 2006; Prince, 2024).

2.1. Hypothesis Development

2.1.1. Parental Leadership in the Family Business (PL-FB) and Next-Gen Family Business Succession Intention (FBSI)

PL-FB sets an example and fosters emotional attachment to the family business, making the next generation more inclined to take over. The visibility of parental dedication and success inspires a sense of responsibility and motivation to continue the family legacy, particularly in cultures with strong familial ties. Only a few empirical studies have discussed the influence of PL-FB on successors in different contexts, reporting different findings. For example, Coffie et al. (2024) surveyed 124 managers/CEOs of family-owned SMEs that had at least transitioned beyond one incumbent leader and found that leaders with transformational and participatory characteristics can contribute positively to successful successions. However, leaders with authoritarian leadership styles tend to demotivate their successors and their Next-Gen FBSIs. In another study, conducted by Liu et al. (2024), involving 179 family members in Chinese FBs, it was revealed that authoritative parenting positively affects succession intention through the mediation of perceived behavioral control, subjective norms, and attitude toward family, while authoritarian parenting does not support this.

Another study by Shanine and Combs (2023), which was conducted using a sample of 119 family businesses along with 24 interviews with leaders of FBs, revealed that the parenting style employed by predecessors influences the psychological functioning and behaviors of successors, as well as overall business performance, indicating the importance of nurturing and supportive parenting in building future leaders in FBs. Cater and Young (2022) conducted quantitative research on family business succession in the USA, focusing on 18 daughters and their families. Their findings demonstrated that there are key factors which, if practiced by parents, may enhance successors’ intentions to take over the business. These factors include positive childhood experiences that build confidence; obtaining a relevant university degree that prepares for leadership; the independent decision of daughters to join their family business; the provision of job training and parental advice to eliminate gender bias; and the responsibility of caring for children. In another study by Matthews et al. (2024), the findings demonstrated the need to understand the interaction between business systems and family in FBs, especially in leadership succession. The study showed that factors such as successors’ perception of their parents (as family and business leaders), the desirability of taking over the business, and successors’ relationship with their families help successors develop an intent to succeed in their FB. Another critical study was carried out by Bozer et al. (2017), who explored the leading personal and professional aspects of succession processes in FBs. They interviewed 57 Australian FB leaders who were getting ready to transition their leadership to another generation. The key findings of this study indicated that factors such as adaptable culture and cohesive family businesses are significant for the transition process. Furthermore, personal factors such as the socialization of FBs and external experiences strengthen successors’ commitments.

Additionally, Cabrera-Sua’rez (2005) confirmed the importance of a good relationship between the successor and predecessor and the need for a successor to assume gradual leadership responsibilities, which indicates the role of the family in teaching their about children leadership in the businesses. Furthermore, Sharma and Irving (2005) stated that four organizational commitments can influence a successor’s intention: affective, normative, calculative, and imperative. It is important to note that successor intention can also be attributed to early life experience, which, in turn, develops the successor’s belief, attitude, and motivation. Generally, parental support influences career exploration (Dietrich & Kracke, 2009) and family embeddedness (Alshibani & Aljarodi, 2024). Based on the above discussion, when a FB practices appropriate leadership styles, it can provide adequate support, skills, and encouragement to motivate children to succeed in their FB. Accordingly, we develop the following hypothesis:

H1. 

PL-FB positively impacts Next-Gen FBSI.

2.1.2. Parental Leadership in the Family Business (PL-FB) and Entrepreneurial Self-Efficacy (ESE)

PL-FB provides a critical example for the next generation, fostering confidence and competence in managing and growing a business. Social learning theory suggests that observing parents’ operational leadership and success builds the required self-belief (self-efficacy) for entrepreneurial activities. This exposure enhances successors’ perceived ability to succeed in similar roles, particularly in culturally tight-knit contexts like Saudi Arabia, where family mentorship is highly influential. Bandura (1997) discussed that different characteristics, such as physical skills, motivation, confidence, self-efficacy, and emotions, can all be obtained from parents. The relationship between parents’ leadership style and children is significant, as it develops children’s thinking and contributes to career development from birth to adulthood (Dietrich & Kracke, 2009; Liu et al., 2024). In this study, we define PL-FB as the process of preparing the next generation for leadership in their FB by offering them advice, adequate training, encouragement and support, and skill development opportunities, which in turn enhances successors’ confidence and readiness to take over leadership of their family businesses and ensure its sustainability and continuity (Clinton et al., 2024; Garcia et al., 2019).

Few studies have discussed how PL-FB interacts with Next-Gen FBSI. For example, the study by Dietrich and Kracke (2009) emphasized that early life experiences shape successors due to their parents’ relationship, permitting them to create better beliefs, attitudes, and motivations for planning a career in their FB. In addition, the study by Garcia et al. (2019) suggested that support and psychological control provided by parents can influence the next generation’s level of self-efficacy and commitment, which may enhance their engagement in their FB. Additionally, Zellweger et al. (2011) found that potential entrepreneurs (students) with an FB background have less confidence in terms of controlling their entrepreneurial career but a high level of self-efficacy for succeeding in it (Zellweger et al., 2011).

Furthermore, a critical study by Garcia et al. (2019) discussed the key issues facing FBs, successors, and parents. The authors reported that parents must deal with the so-called “roots and wings paradox”, which means that they must balance developing confidence in their kids, being independent, and ensuring that their children develop a sense of belonging to the business. In this regard, parents face the challenge of preparing their children for FB leadership. In other words, parents should focus less on business belonging, as this will make children remain within the confines of the business, but they should also not allow too much independence, as this will drive their children away from the business. Hence, balance is required. Extreme actions in either of these two dimensions will affect the other one. Focusing more on roots will make children lose self-confidence in the family business, because they will feel that their skills are not functional elsewhere. However, if too much emphasis is placed on the children’s wings, they will have less attachment to the FB and a lower intention of succeeding in it. Parents strengthen their children’s intention to succeed and self-confidence by allowing them to benefit from the effects of a solid family institution. Parents in FBs provide their children with a business environment filled with unity and belonging, which guides the next generation and motivates them to develop their attitude and behavior toward business succession with more confidence and belief in their own success (Monticelli et al., 2020).

FBs with greater intergenerational solidarity tend to develop higher levels of confidence and self-efficacy among their children, resulting in more effective entrepreneurship and more entrepreneurial successors (Gimenez-Jimenez et al., 2020). PL-FB or parents’ influence acts provides an example, and the family’s positive experience in the business increases the successor’s self-confidence while decreasing the fear of failure that is traditionally inculcated in the mind of successors, maximizing their entrepreneurial ambitions and venture creation. Parents and their leadership also provide kids with essential business skills to run FBs successfully (Altinay et al., 2012; Ljubotina & Vadnjal, 2018). From the above discussion, it is clear that parental influence and leadership are essential for enhancing the next generation’s intention to succeed, which is considered low among FB successors (Gagné et al., 2019). Hence, we argue that providing reasonable and adequate family leadership, with different styles and directions, tends to increase the level of confidence, self–efficacy, motivation, and willingness to succeed in the FB in the future. We therefore propose the following hypothesis:

H2. 

PL-FB positively impacts entrepreneurial self-efficacy.

2.1.3. Entrepreneurial Self-Efficacy (ESE), Entrepreneurial Resilience (ER), and Next-Gen Family Business Succession Intention (Next-Gen FBSI)

Self-efficacy, in general, is the belief in one’s abilities to perform specific tasks or succeed in specific areas of life (Bandura, 2006). ESE influences the willingness of the next generation to take over the family business by fostering confidence in their capabilities to manage and expand the business successfully. Higher self-efficacy reduces the perceived risks associated with succession, increasing the likelihood of commitment to leadership roles. PL-FB fosters ESE by providing mentorship, skill development, and confidence; it also improves individuals’ academic and social performance, leading to better self-esteem and reducing depression (Bean, 2006). Higher self-efficacy motivates the next generation to pursue succession in the family business. This mediation effect reflects the critical role of self-efficacy in translating parental leadership into actionable Next-Gen FBSI. Still, little is known about how the interaction between parents and their kids can help develop potential successors in FBs (Liu et al., 2024).

ESE has been found in previous research to play a mediating role between experience and risk propensity and EI (Zhao et al., 2005). In this study, ESE is defined as the ability, confidence, and belief in themselves of a successor to carry out tasks relating to their entrepreneurial activities in the FB. ESE includes the ability to innovate, conduct risky activities, mobilize resources, and discover available but unexplored opportunities (Bandura, 1997; Zellweger et al., 2011) and can also help develop entrepreneurial abilities and intentions (Bullough et al., 2014). Those defined as Next-Gen leaders need to obtain specific skills, such as the ability to manage both their family and business; they also need to maintain good connections with other companies and their family and should ensure support from family employees and other stakeholders in their surroundings (Garcia et al., 2019). Previous research, such as that by Newman et al. (2019), revealed a positive relationship between ESE and venture creation, entrepreneurial performance, and entrepreneurial intention. Maczulskij and Viinikainen (2023) also reported that a higher confidence level leads to a higher possibility of an individual becoming an entrepreneur. This confidence also contributes to improved planning for venture formation, successful venture creation, self-employment, and enhanced entrepreneurial performance. These findings are further supported by other existing research, including by (Hechavarria et al., 2012; Khan et al., 2019; Tegtmeier et al., 2016). Early life experience of a successor, obtained from their parents, allows them to develop attitudes, beliefs, and motivations that increase their intention to pursue a career in their family business (Dietrich & Kracke, 2009).

While ESE is important, ER is also a significant predictor of intention, despite receiving limited attention in the extant literature. ESE and ER are interconnected and are key to enhancing succession intention. Individuals with high levels of ESE will develop higher levels of resilience, including the ability to maximize the benefits of available resources, learn from failure, remain on guard and focused, and regulate emotions, all of which enable successors to continue their entrepreneurial efforts and make right and solid decisions about future business directions, including the succession of their family business (Alshebami, 2023; Bullough & Renko, 2013; Newman et al., 2014). Among the studies discussing the concepts of resilience and ESE in connection to entrepreneurship is that by Gagné et al. (2019), who conducted a longitudinal study of 89 Canadian family businesses to investigate their process toward succession. Their findings indicated that the successor’s confidence and the support obtained from the incumbent actor played a considerable role in making the successor more resilient, adaptable, and proactive, as well as in motivating successors to take over their FB, which then determined whether the business would continue operating. Zellweger et al. (2011) also reported that for individuals to select an entrepreneurial career, two conditions need to be met: a certain level of confidence and belief in themselves and independent motivation, including how much desire individuals have to work independently.

To conclude, PL-FB positively prepares the next generation to take over their FB. It explicitly shapes successors’ confidence, attitude, and skills and positions them well for FB leadership. PL-FB provides the next generation in FBs with various resources. For example, it builds trust and confidence among them and provides them with an adequate business environment in which to practice business activities, thus increasing their willingness to take over the FB in the future. Furthermore, parents may also contribute to enhancing ESE by teaching the next generation the necessary skills for business leadership, developing entrepreneurial thinking, and permitting them to make decisions when running a business, as well as helping them become more resilient in the face of challenges. Based on this, we propose the following hypotheses:

H3. 

ESE positively impacts Next-Gen FBSI.

H4. 

ESE mediates the relationship between PL-FB and Next-Gen FBSI.

H5. 

ESE positively influences ER.

2.1.4. Entrepreneurial Resilience (ER) and Next-Gen Family Business Succession Intention (Next-Gen FBSI)

Resilience generally refers to people’s ability to withstand, adapt positively to, and recover from challenges, adversity, or stress (Luthar et al., 2000). Resilience enables the next generation to persist in their intention to succeed in FBs, despite the challenges associated with transitioning leadership, navigating family dynamics, or competing career opportunities. Resilience provides the mental toughness and adaptability that are needed to commit to the demanding nature of succession. ER is defined in this study as the successor’s ability to recover from, adapt to, and persist during adverse conditions and meet setbacks and challenges while managing their businesses (Bullough et al., 2014; Newman et al., 2014; Tedeschi & Calhoun, 2004).

A resilient individual can maximize the benefits of available resources, learn from failure, remain on guard and focused, and regulate emotions, all of which enable continued entrepreneurial efforts and making right and solid decisions about future business directions (Alshebami, 2023; Bullough et al., 2014), including the succession of family businesses. Furthermore, resilient people always look for positive outcomes (Hlatywayo et al., 2017), which can include developing intentions to participate in succession, leading to a better career. Furthermore, while resilience is important for an individual, Newman et al. (2014) emphasized that self-efficacy is also essential, because it supplies individuals with the confidence to manage challenges and adapt. In addition, Bullough et al. (2014) emphasized that ESE positively influences resilience by enabling entrepreneurs to persist in the face of adversity, particularly in uncertain and resource-constrained environments.

A relevant study on resilience is that by Jin (2017), who attempted to investigate the influence of psychological capital (hope, resilience, and self-efficacy) on entrepreneurial intention and reported a positive and significant connection between resilience and EI. The study by Hlatywayo et al. (2017) also confirmed that psychological capital positively contributes to enhancing entrepreneurial intention. Another investigation, conducted by Gould and Dieffenbach (2002), reported that individuals possessing high levels of resilience tend to work better under pressure and deal with adversity in a better way than people with low resilience (Korber & McNaughton, 2018). Resilience can also help individuals select the right career (Salisu et al., 2020) and has been proven to affect EI through different mediations, namely, subjective norms, perceived behavioral control, and personal attitude (Steinbrink & Ströhle, 2024). It is important to note that resilience has different features, including creativity, positive emotions, and a drive for personal growth. These align with determination and a willingness to start an enterprise and are essential for entrepreneurial intention (Liñán & Chen, 2009).

Furthermore, in the existing literature, resilience has been emphasized as a great mechanism for enhancing persistence and coping with challenges (Corner et al., 2017). It also acts as a mediator between the effects of leadership and self-efficacy on entrepreneurial intentions and continuity (Fatoki, 2018; Korber & McNaughton, 2018). Hence, it is logical to anticipate that entrepreneurial resilience is an essential mechanism linking self-efficacy and leadership behaviors to the next generation’s intention to succeed in the family business.

In the context of FBs, we argue that parents who possess resilience characteristics transfer them to their children (successors); this teaches them the ability to adapt to challenges and deal with crises, as well as increasing their hardiness, knowledge, self-esteem, and intelligence (Gavidia-Payne et al., 2015; Zehrer & Leiß, 2019), which in turn increases their succession intention. It is important to note that the next generation develops resilience as they grow within an FB and are exposed to different business environments that are characterized by failure, risks, opportunities, and challenges. Accordingly, by dealing with these challenges and learning from past experiences, the next generation builds resilience, strengthening their confidence and adaptability in future obstacles. This developed resilience will ultimately help them develop a clear succession intention.

PL-FB plays a crucial role in shaping children’s entrepreneurial resilience (ER) by instilling values, attitudes, and behaviors that promote adaptability, perseverance, and innovative thinking. Entrepreneurial resilience refers to an individual’s ability to recover from setbacks, persist through challenges, and adapt to uncertainties in entrepreneurial ventures (Bullough & Renko, 2013). Parents, as primary influencers, create foundational experiences that nurture these attributes, particularly in family businesses (FBs), where children are often exposed to entrepreneurial practices from an early age. PL-FB in family businesses nurtures entrepreneurial resilience (ER) by providing role models, emotional and psychological safety, decision-making opportunities, and access to resources and networks. These influences create an enabling environment where children develop confidence, adaptability, and perseverance—qualities that are central to entrepreneurial success (Shepherd et al., 2011). The intergenerational transmission of entrepreneurial values and practices positions children from entrepreneurial families to be more resilient and capable of thriving in dynamic business environments (Zellweger et al., 2011).

H6. 

PL-FB in FBs positively influences ER.

H7. 

ER positively influences Next-Gen FBSI.

H8. 

ER mediates the relationship between PL-FB and Next-Gen FBSI in FBs.

2.1.5. Sibling Dynamics and Family Business Succession

Sibling dynamics are pivotal in shaping succession in family businesses in Saudi Arabia, influencing both the process and outcomes of leadership transitions. Relationships among siblings can foster collaboration and shared leadership, particularly in families with multiple heirs, where complementary skills and experiences may be leveraged to strengthen business continuity. However, sibling rivalry, often rooted in birth order, favoritism, or unequal contributions, can escalate into conflict that threatens organizational stability (Arzubiaga et al., 2024; Avloniti et al., 2014). Saudi Arabia’s patriarchal culture and Islamic inheritance laws add further layers of complexity, often favoring male heirs and resulting in ownership fragmentation (Bizri, 2016). This fragmentation can intensify tensions, particularly when successors lack structured governance systems to guide transitions (Bozer et al., 2017).

Recent scholarship highlights that birth order plays a significant role in shaping succession intentions and intergenerational relationships within family firms. Gimenez-Jimenez et al. (2020) found that first-born children often perceive a stronger sense of responsibility and legitimacy as successors due to traditional expectations and parental preferences. In contrast, later-born siblings may either pursue independence outside the family business or demonstrate their interest in succession when the family culture supports merit-based succession rather than strict primogeniture. The study emphasizes that emotional closeness and intergenerational solidarity can mitigate the disadvantages of later-borns, suggesting that supportive family relationships and open communication reduce rivalry and enhance motivation for collective succession. Thus, while first-borns frequently hold structural advantages, psychological and relational factors can override the effects of a hierarchical birth order, allowing multiple siblings to contribute productively to business continuity.

In contrast, succession may appear more straightforward when no siblings are present due to the absence of intra-family competition. Nevertheless, sole successors frequently encounter increased pressure, limited perspectives, and heightened vulnerability to failure in the absence of siblings’ emotional and operational support (Davis et al., 1997; Friedman, 1991). Recent scholarship further underscores the importance of intergenerational solidarity and emotional support from parents in shaping the outcomes of succession. For instance, Gimenez-Jimenez et al. (2020) highlight how solidarity across generations fosters stronger succession intentions and mitigates potential conflict, while Lyons et al. (2023) emphasize the critical role of parental emotional support in motivating and sustaining next-generation commitment to leadership succession. These insights suggest that the quality of sibling relationships, combined with broader family support systems, is decisive in either enabling or obstructing succession in Saudi family firms.

Accordingly, the presence of older siblings is hypothesized to moderate the relationships between PL-FB, ESE, ER, and Next-Generation Family Business Succession Intention (FBSI), such that the strength and direction of these associations differ between successors with older siblings and those without. This reflects the nuanced role of family dynamics in either enabling or constraining the successful transfer of leadership across generations.

H9. 

The presence of older siblings moderates the relationships between parental leadership in the family business (PL-FB), entrepreneurial self-efficacy (ESE), entrepreneurial resilience (ER), and Next-Generation Family Business Succession Intention (FBSI), such that these relationships differ between respondents with older siblings and those without.

2.1.6. Conceptual Model of the Study

Figure 1 illustrates the hypothesized research model, which examines the interplay between PL-FB, ESE, ES, and Next-Gen FBSI.

3. Methodology

3.1. Data and Sample Selection Criteria

The data for this study were drawn from the Global University Entrepreneurial Spirit Students Survey (GUESSS project), a large-scale, international research initiative designed to explore university students’ entrepreneurial intentions and behaviors. Detailed information about the GUESSS project is available in the works of Alshibani and Aljarodi (2024) and Zellweger et al. (2011), highlighting its robust methodology and relevance to entrepreneurship research. GUESSS provides an extensive dataset for examining entrepreneurial phenomena across diverse cultural, institutional, and economic contexts. This study focused on Saudi Arabia, a country with unique economic dynamics, social structures, and cultural factors that shape the entrepreneurial ecosystem (Alshibani & Aljarodi, 2024). Saudi Arabia’s emphasis on fostering entrepreneurship as part of its Vision 2030 initiative makes it an especially relevant context for studying Next-Gen FBSI.

To align this study with the research objective of understanding potential successors in family businesses, the sample was deliberately restricted to students whose parents—either their father, mother, or both—were actively involved in self-employment. This criterion ensured that the sample represented individuals who were most likely engaged in family business succession. The rationale for this selection lies in the distinctive role that family enterprises play in economic development and intergenerational wealth transfer, particularly in contexts like Saudi Arabia, where family businesses dominate the private sector. The definition of family businesses adopted in this study aligns with the framework proposed by Baltazar et al. (2023), which identifies family businesses as enterprises where at least 50% of ownership is concentrated within a single family. This definition underscores the critical role of familial ties in decision-making and strategic direction, making these businesses distinct from non-family enterprises.

The inclusion of students as the primary research cohort is well-justified. Students represent a transitional group that are poised to make significant career decisions, as highlighted in the works of Krueger et al. (2021) and Samara (2021). Their unique position at the crossroads of education and career provides valuable insights into the factors influencing Next-Gen FBSI. Students often rely on subjective criteria to evaluate their career prospects, including the viability of assuming leadership roles within their family businesses. This decision-making process is influenced by a range of factors, such as their perception of entrepreneurial self-efficacy and emotional resilience and the perceived attractiveness of entrepreneurship as a career path, as evidenced by existing findings (Criaco et al., 2017; Gimenez-Jimenez et al., 2020; Lyons et al., 2023).

Moreover, the student sample is particularly suitable for testing this study’s theoretical framework, which emphasizes the interplay between PL-FB, ESE, ER, and Next-Gen FBSI. By focusing on students with exposure to family businesses, this study captures the early stages of entrepreneurial development and succession planning. This approach not only enhances the study’s relevance to understanding intergenerational entrepreneurship but also provides actionable insights for policymakers and educators seeking to support continuity and innovation in family businesses.

3.2. Measures

Next-Gen FBSI was assessed using an adapted seven-point Likert version of the Entrepreneurial Intention Questionnaire (EIQ) scale developed by Liñán and Chen (2009). The adaptation aimed to specifically capture the participant’s willingness, readiness, and motivation to take over their family business, ensuring its relevance to the family business context while preserving the scale’s established reliability and validity. Previous research, (e.g., Author, year; Lyons et al., 2023) has utilized this scale for similar purposes (refer to Appendix A for all items). The scale’s reliability was confirmed by a Cronbach’s alpha of 0. 0.963, indicating acceptable internal consistency. A confirmatory factor analysis (CFA) was conducted to validate the structure of the scale, yielding excellent fit indices (CFI = 0.978; TLI = 0.963; RMSEA = 0.133).

ESE was assessed using a seven-point Likert (Zhao et al., 2005) scale, which evaluates confidence in performing entrepreneurial tasks such as opportunity identification and resource mobilization (Suhartanto, 2023; Zhu & Zhou, 2022). The CFA results showed strong factor loadings (0.698–0.841), confirming convergent validity. However, the overall fit indices indicated some misfit (RMSEA = 0.155; CFI = 0.975; TLI = 0.926). The modification indices suggested residual correlations between several items (refer to Appendix A for all items), indicating potential item redundancy. Although model respecification could improve the fit, the scale was retained in its original form to preserve theoretical consistency with prior studies (Zhao et al., 2005). This limitation is acknowledged in the interpretation of our results.

ER was measured using the seven-point Likert scale developed by Sinclair and Wallston (2004), which assesses respondents ability to adapt to and recover from challenges in the entrepreneurial context, with higher scores indicating greater resilience. The scale’s psychometric properties, including reliability and validity, have been thoroughly documented in previous research (Hedner et al., 2011; Yao et al., 2021) (refer to Appendix A for all items). The CFA results from this study confirmed its reliability, with factor loadings ranging from 0.783 to 0.841 and a high internal consistency (Cronbach’s alpha = 0.886). The model fit indices demonstrated excellent fit (CFI = 1; TLI = 1; RMSEA = 0.008; 90% CI: 0.000–0.088).

For all three scales, factor scores were computed by weighting individual items according to their factor loadings from the CFA, with higher scores reflecting stronger levels of the underlying construct.

PL-FB was theoretically operationalized by using three binary (yes/no) items, designed to capture the operational and ownership roles of parents in the family business, as well as the participant’s perception of the business as a family enterprise. The items included the following: “Are your parents (i.e., your father and/or your mother) leading the business operationally?” “Do they hold a majority ownership share in the business?” and “Do you regard this business as a ‘family business’?”. This operationalization therefore captures the structural and ownership dimensions of PL-FB rather than its full behavioral and relational scope, which is commonly emphasized in the literature. A tetrachoric correlation matrix was computed to account for these binary variables’ dichotomous nature. Based on this, a factor analysis was conducted to extract a composite factor score representing parental leadership. The resulting composite score captures the shared variance across the three items, providing a unified metric for subsequent analysis.

The presence of older siblings was defined as the categorical existence of at least one older sibling within the family structure (coded as 0 = no older siblings, and 1 = one or more older siblings). In the context of succession in family businesses, sibling configurations have been shown to significantly influence leadership transitions and the distribution of responsibilities among members of the next generation (Avloniti et al., 2014; Arzubiaga et al., 2024). The presence of older siblings introduces both opportunities and challenges. On the one hand, older siblings may provide emotional support, mentorship, and shared leadership roles, thereby enhancing entrepreneurial self-efficacy (ESE) and resilience (ER). On the other hand, sibling rivalry, effects of birth order, and perceived favoritism may hinder effective succession planning and exacerbate conflict within family firms (Bizri, 2016; Bozer et al., 2017).

4. Data Analysis Techniques

Structural equation modeling (SEM) was employed in a two-step approach to comprehensively evaluate the relationships among PL-FB, ESE, ER, and Next-Gen FBSI. In the first step, a basic SEM model was tested to examine the direct and indirect effects of PL-FB on Next-Gen FBSI and the mediating roles of ESE and ER. This approach facilitated simultaneous estimation of multiple dependent and independent variables, enabling an integrated analysis of the hypothesized framework. The model was fitted using maximum likelihood estimation (MLE), which is recognized for its efficiency under the assumption of multivariate normality.

In the second step, a multi-group SEM analysis was conducted to investigate the moderating role of sibling presence in the hypothesized relationships. The sample was divided into two groups: respondents with siblings and respondents without siblings. This comparative analysis aimed to evaluate whether the presence of siblings influenced the dynamics under investigation, reflecting the complex role of family dynamics in shaping the development of FBSI in family businesses. The model’s overall fit was evaluated using a range of goodness-of-fit indices, including the Chi-Square Test (χ²), Root Mean Square Error of Approximation (RMSEA), Comparative Fit Index (CFI), Tucker–Lewis Index (TLI), and Standardized Root Mean Square Residual (SRMR). RMSEA values below 0.08 and SRMR values below 0.08 were considered indicators of acceptable fit, while CFI and TLI values above 0.90 indicated a well-fitting model.

Additionally, participation in GUESSS was voluntary and anonymous, reducing potential social desirability bias. Harman’s single-factor test indicated that no single factor dominated the variance (<40%), suggesting that common method bias was unlikely to threaten the validity of the results and providing confidence that the observed relationships are not solely attributable to measurement artifacts.

5. Findings and Discussion

As shown in

Table 1. Descriptive statistics of the sample (N = 522).

		Freq	%			Freq	%
Gender	Male	62	11.88	Number of employees in the FB	1–5 employees	76	14.56
	Female	460	88.12		6–20 employees	108	20.69
Age	<20	179	34.29		21–50 employees	116	22.22
	20–24	197	37.74		More than 50 employees	222	42.53
	25+	146	27.97	Parents leading the business	No	177	33.91
Educational level	Graduate	121	23.18		Yes	345	66.09
	Undergraduate	401	76.82	Ownership in the FB	0–49% (minority owner)	115	22.03
Entrepreneurship education	Yes	264	50.57		50%	166	31.8
	No	258	49.43		51–100% (majority owner)	241	46.17
Field of study	Arts/Humanities (e.g., cultural studies, history, linguistics, philosophy, religion)	28	5.36	Regards this business as a “family business”?	No	312	59.77
	Business/Management	161	30.84		Yes	210	40.23
	Computer Sciences/IT	49	9.39	Personal ownership stake in the FB	No	387	74.14
	Economics	19	3.64		Yes	135	25.86
	Engineering (incl. architecture)	19	3.64	Working for your parents’ FB	No	434	83.14
	Human Medicine/Health Sciences	57	10.92		Yes	88	16.86
	Law	26	4.98	Age of the FB	<5	59	11.3
	Mathematics	3	0.57		5–9	55	10.54
	Natural Sciences	23	4.41		10–19	62	11.88
	Science of Art (e.g., art, design, dramatics, music)	8	1.53		20–29	72	13.79
	Social Sciences (e.g., psychology, politics, education)	19	3.64		30–39	39	7.47
	Other	110	21.07		40–49	13	2.49
Family Background	Yes, father	339	64.94		50+	222	42.53
	Yes, mother	40	7.66	Economic sector of the FB	Primary sector (utilizing natural resources, e.g., agriculture, forestry, and fishing)	64	12.26
	Yes, both	143	27.39		Secondary sector (producing goods, e.g., manufacturing, processing, and construction)	125	23.95
Older Sibling presence	0	100	19.61		Tertiary sector (providing services, e.g., in tourism, banking, healthcare, and legal)	91	17.43
	1	105	20.11		Quaternary sector (intellectual activities, e.g., research, IT, education, and consulting)	39	7.47
	2 or more	317	62.16		Other/not sure	203	38.89

Source: Primary data.

, the sample was predominantly female (88%). Respondents were fairly evenly distributed across age groups (<20 years: 34%; 20–24 years: 38%; ≥25 years: 28%), with most being undergraduates (77%). About half had received entrepreneurship education. Business/Management was the most common field of study (31%), followed by Health Sciences (11%) and IT (9%), with diverse representation across other disciplines.

Family involvement varied: two-thirds reported that their parents led a business, but only 40% considered it a “family business.” Few respondents (17%) were actively working in their parents’ business. Ownership was mostly majority shares (46%) or equal (32%). Regarding siblings, 62% had two or more older siblings. Family businesses spanned multiple sectors, with notable representation in secondary (24%), tertiary (17%), and primary (12%) industries, although a large share (39%) reported “Other/Not Sure.”

Table 2. Comparison of key variables based on sibling status: mean differences and statistical significance.

Variable	Group With Older Siblings (Mean)	Group Without Older Siblings (Mean)	Mean Difference	p-Value
Next-Gen Family Business Succession Intention (FBSI)	3.6	3.65	−0.05	0.018
Entrepreneurial Self-Efficacy (ESE)	5.05	5.04	0.02	0.025
Entrepreneurial Resilience (ER)	5.33	5.16	0.17	0.002
Parental Leadership in Family Business (PL-FB)	0.49	0.47	0.02	0.013

Primary data.

shows statistically significant differences between individuals with and without siblings across all four variables. For FBSI, individuals without siblings reported a slightly higher mean score (M = 3.65) than those with siblings (M = 3.60), yielding a mean difference of −0.05 (p = 0.018; d = 0.08). In contrast, for ESE, individuals with siblings reported a marginally higher mean score (M = 5.05) relative to those without siblings (M = 5.04), with a mean difference of 0.02 (p = 0.025; d = 0.05). With respect to ER, individuals with siblings demonstrated significantly higher resilience (M = 5.33) than those without siblings (M = 5.16), corresponding to a mean difference of 0.17 (p = 0.002; d = 0.22). Finally, for perceived PL-FB, respondents with siblings reported a slightly higher mean score (M = 0.49) than those without siblings (M = 0.47), with a mean difference of 0.02 (p = 0.013; d = 0.10). Although these differences reached statistical significance, the effect sizes were uniformly small, indicating limited practical significance. Thus, while the presence of siblings appears to influence these variables, the magnitude of its effect remains modest.

Model 1 in

Table 3. Results of SEM Model 1.

Path	Coefficient	p-Value	Status
H1: PL-FB → Next-Gen FBSI	0.2495	0.315	Not Confirmed
H2: PL-FB → ESE	0.5548	0.004	Confirmed
H3: ESE → Next-Gen FBSI	0.3442	<0.001	Confirmed
H4: PL-FB → ESE → Next-Gen FB FBSI (Mediation)	0.19095 (indirect)	0.017 (bootstrap)	Confirmed (full mediation)
H5: ESE → ER	0.6326	<0.001	Confirmed
H6: PL-FB → ER	−0.0105	0.94	Not Confirmed
H7: ER→ Next-Gen FBSI	−0.0331	0.669	Not Confirmed
H8: PL-FB → ER → Next-Gen FBSI (Mediation)	0.00035 (indirect)	0.976 (bootstrap)	Not Confirmed

Note: Bootstrap Replications = 1000; source: primary data.

presents the SEM results, which revealed partial support for the proposed model. Notably, the direct path from PL-FB to Next-Gen FBSI (H1) was not significant (β = 0.250; p = 0.315), indicating that parental leadership in the family business does not directly influence succession intentions. Among the hypothesized paths, ESE emerged as the most influential construct. Specifically, ESE was significantly predicted by PL-FB (H2; β = 0.555; p = 0.004) and, in turn, significantly predicted Next-Gen FBSI (H3; β = 0.344; p < 0.001). Furthermore, ESE fully mediated the relationship between PL-FB and FBSI (H4; β = 0.191; p = 0.017; bootstrap), reinforcing its central role in shaping succession outcomes. ESE also strongly predicted entrepreneurial resilience (H5; β = 0.633; p < 0.001), confirming its importance in fostering psychological resources for Next-Gen members.

In contrast, our hypotheses involving ER were not supported. Neither the direct path from PL-FB to ER (H6; β = –0.011; p = 0.940), nor the direct path from ER to FBSI (H7; β = –0.033; p = 0.669), nor the mediating effect of ER between ESE and FBSI (H8; β = 0.000; p = 0.976; bootstrap), was significant. Similarly, the direct path from PL-FB to FBSI (H1; β = 0.250; p = 0.315) did not reach significance. These findings underscore the pivotal role of ESE as both a predictor and mediator, while suggesting that ER may play a less central role in the studied context. This contrast between supported and unsupported hypotheses highlights the need for greater caution in positioning resilience as a central construct, as its effects may depend on contextual or cultural contingencies.

The model demonstrated excellent fit based on multiple goodness-of-fit indices. The Chi-Square Test (χ²) indicated no significant difference between the observed and predicted covariance matrices (χ² = 0; p > 0.05), suggesting a well-fitted model. The RMSEA was 0.000, indicating an excellent fit to the data. Additionally, the CFI and TLI exhibited perfect values 1.000, exceeding the threshold of 0.90 required for a good fit. Furthermore, the SRMR was 0.000, well below the acceptable limit of 0.08, confirming the model’s robust fit. These fit indices collectively demonstrate that the specified model adequately represents the underlying relationships among the variables, supporting the proposed theoretical framework.

The multi-group SEM analysis (Model 2, shown in

Table 4. Results of SEM Model 2 (multi-group analysis).

Hypothesis	No Siblings Results	With Siblings Results
H1: PL-FB → Next-Gen FBSI	0.153 (p = 0.581)	0.677 (p = 0.221)
H2: PL-FB → ESE	0.565 ** (p = 0.007)	0.512 (p = 0.288)
H3: ESE → Next-Gen FBSI	0.337 *** (p = 0.001)	0.359 * (p = 0.023)
H4: PL-FB → ESE → Next-Gen FB FBSI (Mediation)	0.631 *** (p > 0.001)	0.636 ** (p > 0.001)
H5: ESE → ER	0.631 *** (p > 0.001)	0.636 *** (p > 0.001)
H6: PL-FB → ER	0.027 (p = 0.863)	−0.189 (p = 0.559)
H7: ER→ Next-Gen FBSI	−0.035 (p = 0.69)	−0.012 (p = 0.944)
H8: PL-FB → ER → Next-Gen FBSI (Mediation)	0.153 (p = 0.581)	0.677 (p = 0.221)

Note: source primary data (p < 0.05 = *; p < 0.01 = **; p < 0.001 = ***).

) examined the differences between respondents with older siblings and those without older siblings. For respondents without older siblings, ESE significantly influenced FBSI (H3; β = 0.337; p < 0.001), while ER showed no significant effect (H7; β = −0.035; p = 0.690). PL-FB did not directly impact FBSI (H1; β = 0.153; p = 0.581) but significantly predicted ESE (H2; β = 0.565; p = 0.007). Additionally, ESE strongly affected entrepreneurial resilience (H5; β = 0.631; p < 0.001).

In contrast, among respondents with older siblings, ESE continued to show a significant relationship with FBSI (H3; β = 0.359; p = 0.023), while ER remained non-significant (H7; β = −0.012; p = 0.944). PL-FB demonstrated a more substantial but still non-significant influence on FBSI (H1; β = 0.677; p = 0.221) and did not significantly predict ESE (H2; β = 0.512; p = 0.288) or ER (H6; β = −0.189; p = 0.559).

The model fit indices (RMSEA = 0.000; CFI = 1.000; TLI = 1.000; SRMR = 0.000) indicated an excellent overall fit, confirming that the multi-group SEM model adequately represented the relationships in both groups. The results highlight differences in the influence of PL-FB and entrepreneurial constructs on FBSI depending on the presence of siblings. Although statistical significance was limited, some variations in effect sizes were observed. Specifically, PL-FB exhibited a more substantial, though non-significant, influence on Next-Gen FBSI in the sibling group (β = 0.677; p = 0.221) compared with the no-sibling group (β = 0.153; p = 0.581). In contrast, the path from ESE to Next-Gen FBSI remained significant in both groups, although the effect sizes varied (no-sibling group: β = 0.337, and p < 0.001; sibling group: β = 0.359, and p = 0.023). These findings suggest that sibling dynamics may shape the succession process in family businesses, albeit in nuanced ways, and point to the need for further qualitative research into the mechanisms underlying these relationships.

Our results are consistent with previous research demonstrating that parental leadership plays a critical role in enhancing the entrepreneurial self-efficacy of children and strengthening their commitment to the family business, thereby fostering greater engagement and succession success (Zellweger et al., 2011; Garcia et al., 2019). These findings also support prior arguments that family businesses that are characterized by strong intergenerational solidarity are more likely to cultivate self-efficacy and confidence among members of the next generation, ultimately increasing their entrepreneurial capacity and the likelihood of successful succession. In this regard, parents who exhibit effective leadership not only contribute to the development of business-related skills in their children, thus enabling them to manage family businesses more effectively (Altinay et al., 2012; Ljubotina & Vadnjal, 2018), but also nurture self-efficacy that reinforces resilience and the ability to sustain operations (Zellweger et al., 2011; Bullough et al., 2014). While the cross-sectional nature of our data limits causal inference, the directionality proposed in the model is grounded in social capital theory, which posits that parental leadership and intergenerational socialization precede the development of entrepreneurial self-efficacy and, subsequently, succession intentions. Thus, the observed associations are consistent with theoretically plausible causal pathways rather than random correlations.

At the same time, our findings suggest that cultural traditions and familial obligations in Saudi society may overshadow individual psychological characteristics such as resilience when decisions relating to succession are made. Entrepreneurial self-efficacy appears to exert a more decisive influence on succession intention, thereby limiting the extent to which resilience independently contributes to this process. These insights highlight the pivotal role of both contextual and cultural dynamics in shaping the applicability of social capital theory (SCT) within the context of Saudi Arabian family businesses. They underscore the importance of considering how cultural norms and family structures interact with individual-level psychological resources in determining next-generation succession outcomes.

The observed relationships should be interpreted within the specific socio-cultural and institutional context of Saudi Arabia. Strong familial hierarchies, collectivist values, and gender norms may amplify the influence of parents while constraining autonomous succession choices. Similarly, sectoral differences—particularly between traditional and service-based family businesses—may limit the strength of self-efficacy in shaping succession intention. Generational distance also represents a key boundary condition, as successors from second or third generations may experience weaker emotional attachment or less direct exposure to parental leadership. Future research could explore these contingencies through multi-level or longitudinal designs.

To ensure the robustness of the proposed structural model, several alternative path configurations were tested by removing non-significant paths and assessing their impact on the model fit. Specifically, paths from entrepreneurial resilience to Next-Gen FBSI and from parental leadership to FBSI were excluded due to their lack of statistical significance. The revised model exhibited a substantially declined overall fit, with key indices such as the RMSEA (0.752) and CFI (0.125) falling well below acceptable thresholds. These results suggest that even non-significant paths may contribute to the explanatory power and coherence of the model, underlining the importance of retaining theoretically justified paths. Further exploratory analyses, including examining reverse causality and potential mediating effects, confirmed the stability of the findings and underscored the necessity of a balanced model that integrates theoretical and statistical considerations.

In addition to structural robustness, the measurement model was subjected to multi-group CFA to test for measurement invariance across groups. This analysis was conducted in three stages: configural invariance, metric invariance, and scalar invariance. The configural invariance model demonstrated strong fit indices, with a CFI of 0.974 and TLI of 0.973, indicating that the overall measurement structure was consistent across groups. In the metric invariance model, constraining factor loadings across groups had a minimal impact on fit indices, thus supporting the equivalence of factor loadings. Finally, the scalar invariance model, which introduced constraints on intercepts, showed a minor reduction in fit but remained within acceptable thresholds, with an CFI of 0.966 and TLI of 0.970. These results provide strong evidence for the reliability and stability of the measurement model across groups, reinforcing the validity of the proposed framework.

6. Implications

6.1. Theoretical Implications

The findings from this study have several theoretical implications; for example, this study is considered one of a limited number of investigations focusing on succession intention, ESE, ER, PL-FB, and the influence of siblings in developing countries like Saudi Arabia. The study adds to the literature on entrepreneurship, businesses, and organizations by offering insights into key factors affecting succession intention. The positive connection between ESE and ER adds to the available literature on the vital role of psychological factors in enhancing the succession process (Bullough & Renko, 2013; Fatoki, 2018; Korber & McNaughton, 2018). In other words, when a successor develops a higher level of ESE, their ability to cope with setbacks and challenges will increase. This study also reveals that PL-FB does not exhibit a positive influence on succession intention. Still, it influences ESE, confirming its positive role in developing succession intention and an entrepreneurial mindset (Zhao et al., 2005; Luthans & Ibrayeva, 2006; Newman et al., 2019). This also indicates that FB theories must consider different methods and check other factors affecting succession intention. The insignificant association between ER and succession intention emphasizes the need to investigate the relationship between the resilience of FBs and entrepreneurship further (Alshebami, 2023; Zehrer & Leiß, 2019). ER’s complex role in succession requires further clarification. This study also confirms the vital role of emotional and psychological factors in FB theory, in contrast to research focusing on financial aspects, which may ignore other essential factors in succession in FBs. Our findings align with SCT’s claim that resources such as confidence, role modeling, support, and trust within a close relationship are essential for developing individual capabilities. The findings relating to our hypotheses also advance the SCT by confirming that social ties not only present an emotional factor for individuals, but also provides psychological support that strengthens self-efficacy and ability in leadership and management. The resources that individuals gain from social capital interact, resulting in further development of different aspects of psychological and human capital. Finally, in Saudi Arabia, it was confirmed that inheritance traditions, family ties, and parental leadership are deeply rooted norms, establishing the applicability and power of the SCT’s mechanisms in the study context (Alshibani & Aljarodi, 2024; Alshibani et al., 2025; KPMG, 2023).

6.2. Practical Implications

Important implications can be identified as a result of our findings. For example, the confirmation of a positive relationship between PL-FB and ESE confirms that parents can influence their children’s confidence and self-efficacy (Suhartanto, 2023; Gagné et al., 2019). Hence, there should be more focus on providing students with more guidelines and introducing more leadership practices that empower the students or children to take roles in their family business (Ahmad, 2020; Jahmurataj et al., 2023). Parents must also provide an adequate environment for enhancing their children’s entrepreneurial thinking and intention to ensure business continuity. Furthermore, the findings relating to the influence of ESE on FB succession indicate that family businesses need to focus on providing more training and support for their children, as this will lead to higher self-efficacy and more intent to participate in the business; family businesses may concentrate on enhancing their children’s skills of adapting to changes and overcoming challenges, as this will help potential successors deal effectively with future challenges during their leadership of the FB. Different types of training, including mentorship programs, workshops, and real-world entrepreneurial experience, can help enhance self-efficacy, leading to a more successful succession. This study also confirmed that higher ESE leads to more resilience (Bullough et al., 2014; Corner et al., 2017; Fatoki, 2018). In other words, successors with a higher level of self-confidence can adapt to challenges and problems arising during their leadership of the FB more effectively. There should be more focus on offering students training that enhances their problem-solving skills and helps them make informed decisions under uncertainty and develop coping strategies for dealing with failure and setbacks (Shepherd et al., 2011; Alshebami, 2024). There is also a need to offer guidelines for the successors on maintaining a positive outlook during challenging periods, encouraging them to take on challenging roles that require them to use their skills and abilities, rather than receiving oral directions. Finally, it is essential to foster a culture of succession and share stories of success and failure that can act as a source for increasing resilience and self-efficacy among potential successors (Clinton et al., 2024; Gimenez-Jimenez et al., 2020). These recommendations should, however, be interpreted with caution, as the effectiveness of parental leadership interventions may differ across sectors and generations. For example, succession strategies that succeed in manufacturing-based family firms may not translate seamlessly into knowledge-intensive or service-oriented businesses, where innovation and autonomy play stronger roles.

7. Conclusions

Businesses are vital to economic growth and development, regardless of their type or size. FBs are no exception; they contribute significantly by generating employment opportunities, reducing unemployment, and ensuring the continuity of enterprises through leadership succession. Despite this critical role, FBs face persistent challenges, with leadership succession representing one of the most pressing concerns. Accordingly, researchers, policymakers, and stakeholders must investigate the factors that enhance FBSI among the next generation of family business members. This study sought to contribute to this line of inquiry by examining the antecedents of FBSI among a sample of 522 students from Saudi universities, applying social capital theory as the guiding framework. The findings revealed that PL-FB, as a form of social capital, positively influences ESE, significantly predicting Next-Gen FBSI. Furthermore, ESE was shown to mediate between PL-FB and FBSI, underscoring its central importance in shaping successors’ aspirations. The results also confirmed a strong link between ESE and ER, although resilience did not directly predict FBSI in this sample. Taken together, these findings highlight the pivotal role of ESE as both a predictor and mediator, while suggesting that ER may play a more context-dependent role in succession processes.

Like all studies, this research has limitations that should be acknowledged. First, the sample composition constrains the generalizability of our findings. The sample was strongly gender-biased, with 88% of respondents being female. While this reflects the demographics of the surveyed universities, it limits the applicability of the results to more gender-balanced contexts, where male participation in family businesses is higher. Moreover, only 16.8% of respondents reported working directly in their family businesses. This raises concerns about external validity, as any FBSI expressed by students without direct involvement may not fully translate into succession behaviors. Future research should strive for more balanced samples in terms of both gender and active engagement in family businesses.

Second, limitations relate to the measurement of PL-FB. In this study, PL-FB was operationalized using three binary indicators. While these measures capture critical structural and perceptual dimensions of parental leadership, they provide a simplified representation compared with the broader conceptualization of PL-FB in the literature, which includes relational, behavioral, and strategic dimensions. Although using a tetrachoric correlation matrix and factor analysis allowed us to derive a composite score, this approach did not fully capture the richness of PL-FB. Future research would benefit from employing validated multi-item scales that more comprehensively measure PL-FB, thereby allowing for deeper insights into its role in shaping FBSI. Finally, this study focused primarily on ESE and ER as psychological mechanisms. While ESE proved central in predicting FBSI, ER did not emerge as a significant direct predictor. This suggests that resilience may be more relevant at later stages of succession or under conditions of heightened conflict or adversity. Future research should therefore consider additional moderating and mediating factors, such as cultural values, social conservatism, or governance mechanisms, to provide a more nuanced understanding of dynamics relating to succession in family businesses. Finally, future studies must consider examining similar models in different cultural and national contexts to support external validity.