Family farm succession: evidence from absorptive capacity, social capital, and socioeconomic aspects

Farm succession is a process socially built from the preparation of the successor and the farm to meet a family business’ expectations. This study aimed to identify how social capital, absorptive capacity, and socioeconomic characteristics influence farm succession. The survey was conducted sampling 82 soybean and corn Brazilian farmers. The questionnaire measured socioeconomic characteristics, Absorptive Capacity (AC), and Social Capital (SC). To test the influence of AC, SC, and socioeconomic characteristics on farm succession, Spearman correlation coefficient (rs) was performed. Results showed that the absorptive capacity can influence farm succession through acquisition, assimilation, use, and transformation of external knowledge into decision making, supporting the definition of successors. Results also suggested that social capital plays an important role to form relationship networks, stimulating discussions, and supporting the designation of successors. The socioeconomic characteristics ‘percentage of family income from the farm, participation in courses and lectures, and being a cooperatives member’ also presented a significant positive correlation with farm succession. Issues related to the capacity to absorb external knowledge, social and symbolic capital and generational transference can be fundamental in the continuity of the family farming business.


Introduction
Farm succession is a process socially built including the preparation of the successor, in addition to the farm, to meet a family business' expectation. Factors such as agrarian and labor legislation, mechanization, changes in the product price and cost of production, price of land, and the feeling of marginalization concerning society can affect the farm succession process (Fischer & Burton, 2014). Succession is the transmission of the managerial control of the farm (Chiswell, 2018), and may involve one successor family member (Joosse & Grubbström, 2017) or multiple successors (Cassidy & Mcgrath, 2014;Grubbström et al., 2014, Zagata & Sutherland, 2015. In managerial transitions at organizational contexts, symbolic capital is visible when there is resistance from current managers to transfer the leadership to new successors, especially when the personal effort dedicated to working is associated with identity and self-esteem. Former managers fear for the loss of recognition and social status by perceiving themselves as retirees and unproductive (Conway et al. 2016).
Current evidence has revealed that the lack of farm succession planning negatively affects land use, agribusiness sustainability, and food security (Zou et al. 2018). Farm succession is crucial for the development and transmission of innovations in agriculture (Potter & Lobley, 1996). In Brazil, as the number of retiree's farmers grows, the migration of young people to cities is increasing, illustrating a scenario of concern regarding the efficient use of land, development, and adoption of innovations in agriculture and expansion of agribusiness. To serve an increasingly competitive market, farmers need to continually update their crops and position their production in value chains (Potter & Lobley, 1996). For these authors, planning and implementing farm succession is essential to positively innovate and motivate the expansion of agribusiness. Any failure in the succession process can generate losses and damages to the farm.
In general, farm size has positively correlated with the presence of a successor. It is also observed that the higher the educational level of the farmer, the lower the probability of succession on newer farms and the greater the probability of succession on older farms (Bertoni & Cavicchioli, 2016a). According to Kruger et al. (2020), accountability and management processes could be related to family farm succession. To Morais et al. (2017) successors aim autonomy in decisions, financial independence, good living and working conditions, agricultural credit, and education and leisure options. The biggest barriers to farm succession are often related to access to land and credit (Eistrup et al., 2019). The succession is linked to expansion strategies and the lack of a successor leads to periods of stagnation, drop in productivity, technological backwardness, or even abandonment of agriculture (Wheeler et al., 2012). To avoid this, the family discussion about farm succession and the division of labor among children helps young people position themselves professionally in agriculture. Thus, farmers' children learn, collaborate, and recognize their rights and duties within the activity from an early age (Keating & Little, 1997).
This study goes beyond previous literature by incorporating absorptive capacity and social capital in farm succession studies. The ability to acquire, assimilate, transform and exploit external knowledge is called absorptive capacity (AC) and can result in innovation and greater organizational flexibility (Zahra & George, 2002;Micheels & Nolan, 2016). When the work environment is stimulating, dynamic, and innovative, the family business becomes more attractive to farm successors (Bertoni & Cavicchioli, 2016a), facilitating the adoption of innovative technologies in the farm (Micheels & Nolan, 2016). The diversity of knowledge transmitted through generations can innovate the family business through the absorptive capacity. Yan et al. (2019) demonstrated that farms that adopted more innovative practices had better cooperation and communication with other farms, acquired and shared knowledge between employees, and encouraged creative environments. The social construction involved in the transfer of ownership to the next generation must be considered in farm succession (Fischer & Burton, 2014). This involves economic characteristics, social norms, and a sense of identification that may be related to social capital (SC) (Gasson & Errington, 1993). Social capital is the willingness of individuals and groups to obtain information, influence, and nurture solidarity with other social actors through the structure and content of existing relationships (Adler & Kwon, 2002).
The social capital and absorptive capacity can influence farm succession in addition to socioeconomic characteristics related to the farmer, his family, and farm (Bertoni & Cavicchioli, 2016a). The objective of this study was to identify how social capital, absorptive capacity, and socioeconomic characteristics influence farm succession.

Absorptive Capacity (AC) and Social Capital (SC)
Absorptive Capacity is the ability of the company to identify, assimilate and exploit external knowledge to achieve profit (Cohen & Levinthal, 1989, 1990. It is a dynamic ability to create and use the knowledge that raises the organization's ability to gain and sustain a competitive position (Zahra & George, 2002). There are three dimensions: (a) ability to identify relevant new knowledge; (b) ability to assimilate this knowledge; and (c) the ability to apply such knowledge for commercial goals (Cohen & Levinthal, 1990;Roberts et al. 2012). The volume of external knowledge captured is dependent on the absorptive capacity, which is transformed into innovation that determines the performance of the company (Egbetokun & Savin, 2014).
The absorptive capacity has been used in studies about innovation in agriculture, mainly by Tepic et al. (2012), Gellynck et al. (2015) and Micheels & Nolan (2016). Our work is based on the AC model developed by Zahra & George (2002) and Micheels & Nolan (2016). According to Zahra & George (2002), AC dynamics have two dimensions: potential absorptive capacity (PAC) and realized absorptive capacity (RAC). PAC offers more strategic flexibility and adaptability in changing environments, sustaining competitive advantages in dynamic industry contexts. RAC is visible in the exploration of innovations and other factors that create competitive advantages (Zahra & George, 2002).
RAC is initiated after assimilating knowledge and integrating individuals into an organization. In this transformation step, previous and acquired knowledge are combined in a process of recoding, incorporation, and conversion that allows new competencies by changing strategy. In the exploration step, the organization's competencies effectively change to implement knowledge, creating routines that allow exploration for a longer period. The new competencies with the routines will bring the competitive advantages that will result in innovation, flexibility, and better organizational performance (Zahra & George, 2002). According to the authors, PAC makes the organization receptive to new knowledge, and RAC leverages the knowledge absorbed. The proportion of these dimensions suggests variation in value creation from existing knowledge.
The relationship networks influence the absorption of knowledge through integration mechanisms that connect and share information. At the same time, power relations within the organization direct the way knowledge is applied and resources are allocated (Todorova & Durisin, 2007). In agriculture, farm succession and the formation of joint ventures for information exchange and business partnerships are also facilitated by informal relationships (Ingram & Kirwan, 2011).
Social Capital is an informal value corresponding to the stakeholder's counterpart of a company that promotes the cooperation of individuals to start or maintain the business (Fukuyama, 2001). It is composed of resources from networks of relationships, such as economic, cultural, or symbolic capital (Bourdieu, 1980), and based on social structures such as communities, religious groups, or families (Coleman, 1988). These structures or networks are composed of norms that facilitate cooperation searching for the maximum benefits for the social group involved in the business (Putnam, 1993).
Social actors who use SC have better access to sources of relevant information, greater levels of influence, power, and control, and enjoy solidarity from other members of the network (Adler & Kwon, 2002). These authors define SC as the disposition of individuals and/ or groups in structures that sustain relationships among social actors, providing information and increasing influence and solidarity among them. This work, like Micheels & Nolan (2016), adopts this definition of social capital. In a cooperative farmers' environment, social capital is also obtained and accumulated from the social relations of the cooperative perspective and can influence the future of regional agricultural development (Akahoshi & Binotto, 2016).
Both AC and SC can contribute by increasing people and community's knowledge and level of specialization. In the agricultural sector, AC and SC can be decisive for the future of agribusiness, technological advancement, and the continuity of agriculture through farm succession.
Absorptive capacity studies allow organizations to be open to knowledge, assimilation of new information, exploration of innovations, and provide advances (Cohen & Levinthal, 1990;Zahra & George, 2002). About social capital, the relationships, structure, influence, and information also contribute to the formation of individuals and groups well informed for decision making and positioning according to changes (Adler & Kwon, 2002), including the agricultural sector (Narayan & Pritchett, 1999). Socioeconomic variables, CA, SC, and farm succession make up the analysis model adopted in this article. The model is represented by Figure 1

Method
This paper aimed to identify how social capital, absorptive capacity, and socioeconomic characteristics influence farm succession. It is an exploratory and descriptive study a questionnaire was applied to farmers based on Micheels & Nolan (2016) and Bertoni & Cavicchioli (2016a). Considering the difficulty of accessing farmers in each state and the lack of a contact list or total of farmer numbers, we surveyed four agricultural cooperatives, five agricultural unions, some agricultural extension agents, rural communities, agronomists, and representatives of input suppliers for the production of soy and corn. The questionnaire was hosted on the SurveyMonkey® virtual platform and the link was sent to the main contacts of each organization.
They were responsible to send the link for farmers or their contacts to us. In some cases, farmers indicated others as possible research participant. The questionnaire was also applied in a personal interview. We collected 109 answers (21 online and 88 personal). Incomplete questionnaires (27) were discarded. Data collection was performed from August to November 2017. We are aware of the limitation that non-probabilistic sampling does not fully equal the representativeness of the whole farmer population. Therefore, our results must be viewed with care.
The questionnaire measured socioeconomic characteristics, AC and CS. In the questions addressing AC and CS, a five-point Likert scale was used, ranging from "Strongly disagree", "Partially disagree", "Disagree or agree", "Partially agree" to "Strongly agree". Variables related to succession and socioeconomic aspects used in the questionnaire are presented in Table 1, and AC and CS variables, Table 4 and Table 5 (presented in section 4.2). The questionnaire was pre-tested with four-grain farmers and no substantial changes were necessary. Two items measured farm succession: The first one was about designated successor and the second if the family discusses the succession of the farm. This item considers the initial stages of succession while the business did not have a predefined successor. Family discussion is assumed to be the proper start to the succession process (Keating & Little, 1997).
In general, the data was negatively skewed. Hence, to test the influence of absorptive capacity, social capital, and socioeconomic characteristics on farm succession, the Spearman correlation coefficient (r s ) was performed. Spearman correlation is recommended when data follow a non-normal distribution, and for ordinal variables. The two succession variables were correlated with socioeconomic variables, AC and CS. Before the analysis, the reliability of the scales used to measure AC and CS was investigated using Cronbach's α coefficient. A Cronbach's α coefficient higher than 0.7 indicates that the different items can be summed and that the median can be used to represent these constructs (Hair et al. 2010). The analysis was performed with STATA 13 software.

Description of the Sample
The continuous variables related to the farmer/farm are presented and described in Table 2. Most farmers researched have advanced age and significant experience in agriculture, as presented in Table 2. Some family members participate in the farm works, which are usually extensive, with many employees and large areas of cultivation. There are very few young people over the age of 15 living on farms. Results of Socioeconomic binary variables are presented in Table 3. Results showed that the majority of the participants are men, members of agricultural cooperatives, and have attended training in recent years. In addition, their family income comes almost entirely from farm activity, which is expanding or stabilizing. The level of education of the farmers is divided between technical level and higher education (with or without postgraduation). Most of the farmers' children have high school (69.5%). Discussion on succession occurs in most households and many families already have a designated successor (43.9%).
Among the women interviewed (7.3%), most discuss the succession issue at home and already have a designated successor (67%).

Descriptive Analysis of Absorptive Capacity and Social Capital
Absorptive capacity was divided into potential and realized absorptive capacity unlike Micheels & Nolan (2016). The Cronbach's α coefficient was above 0.7 for PAC and approximately 0.7 for RAC ( Table 4). We informally obtain industry information through lunch conversations with company representatives or informal conversations 3.00 1.26 We periodically meet clients or business partners to acquire new information 4.00 1.18 Our employees have frequent contact with financial advisors (e.g. accountants) 4.00 1.40 We quickly recognize how changes in laws affect our farm 4.00 1.31 We are slow to recognize changes in our consumer market 3.00 1.34 We quickly recognize technical changes that can be implemented in the farm 4.00 0.98 We quickly understand new opportunities to serve business partners 4.00 1.07 We spend a lot of time talking to technical advisors to recognize the market changes 3.00 1.28 We quickly analyze and interpret changing market demand 4.00 1.14 Cronbach's α coefficient (PAC) = 0.7292

Realized Absorptive Capacity (RAC)
4.00 0.49 We consider changes in market demand for new products and services 4.00 1.13 Our employees record knowledge to be used in the future 4.00 1.00 We quickly recognize the usefulness of new knowledge in farms 4.00 0.98 Our employees hardly share practical experiences from outside agriculture.
2.00 1.29 Every month we discuss with advisors how changes in the market can be used to make changes in the farm 3.00 1.35 We allocate a lot of time to the application of new information on farm 3.00 1.11 It is clear to everyone how activities on the farm should be carried out 4.00 1.04 Information provided by buyers falls on deaf ears on farm 2.00 1.26 We have a clear division of tasks and responsibilities 5.00 1.10 We always consider how to better apply knowledge 5.00 0.82 We directly use external information on farm practices 4.00 0.91 Our employees know the products and services of the farm 5. The flow of knowledge in the absorptive capacity by Zahra & George (2002) is primarily the result of the social and financial effort to identify and obtain external knowledge through social interactions and relationships. Then. external knowledge is routinely analyzed and interpreted to be adopted. The AC variables of relationship and access to information (Micheels & Nolan. 2016) indicate a farmer aware of changes, who relates new information to his experience and knowledge, evaluates impacts of changes in his farm, and, finally, adopts strategies and processes in his farming routine. For the social capital, Cronbach's α coefficient was higher than 0.7. The median values of SC responses were used to represent the construct ( Table 5). The farmer recognizes himself as the one who meets friends (other farmers) with the same educational level as him at events, and this facilitates his social relationships. The farmers' perception of the amount of knowledge they receive about the market and products from local organizations was also relevant. Probably the farmer's sources of information and his social groups allow social capital correlating with his decision by a successor, reaffirmed the social capital study proposed by Adler & Kwon (2002).
The results also confirmed Narayan & Pritchett (1999) by relating social capital to greater community participation and the formation of well-informed groups that make decisions and position themselves in times of change.

Correlations
The results for the Spearman coefficients (r s ) shown in Table 6 indicated that both the absorptive capacity and the social capital are positively correlated to the existence of a designed successor, the percentage of family income from farm activity, and the number of hours in lectures and training participation. Membership in cooperative is positively correlated to family discussion on farm succession. The positive results of correlations between AC constructs and designated successor indicated that farmers are open to acquire and assimilate external knowledge and apply it in the farm routines, supporting the farm succession. The positive correlation between "designated successor" and potential absorptive capacity probably suggested that experienced farmers are open to new knowledge within a context of changes in market demands, technologies, and management, relating to Kruger et al. (2020) suggestion. This is strengthened by scoring the correlation of some variables individually with succession since the positive ones are linked to the constant search for new knowledge and the formal and informal exposure to industry and retail. This points to PAC as relevant to the definition of a successor. Thus, it definitely explores the knowledge absorbed and determines a successor.
The realized absorptive capacity, with the transformation and exploitation of knowledge stages, also presented a positive and relevant correlation with the designated successor. In this case, the correlation occurs through the use of acquired knowledge and strategies of adaptation and flexibility facing market changes, which require innovation in the internal processes of production. The succession process is related to new phases of farm development (Potter & Lobley, 1996), and is considered fundamental to adapt the farm to a new reality (Wheeler et al., 2012). Given the absorptive capacity as a strategic organizational change process aimed at transforming external knowledge into better performance (Zahra & George, 2002), the results are in agreement with Wheeler et al. (2012) when presented the correlation between farm succession and farm expansion strategies. The results also confirmed Bertolozzi-Caredio et al.
(2020) that succession has a major impact on farm improvement and innovation. Our results indicated that both social capital and the existence of a designated successor are positively correlated to PAC and RAC.
The results are confirming Andersen (2015) for RAC, but contradicting for PAC. According to his work, high levels of social capital in family businesses improve family relationships by increasing the acquisition and assimilation of knowledge but slow down transformation and exploitation of the knowledge. These results reinforced the impact of research on absorptive capacity in firms suggested by Andersen (2015). Given the importance of social factors throughout the process of knowledge absorption, our results also reinforced studies in AC as they corroborate with Todorova & Durisin (2007) and contributed to broadening the AC framework beyond the contributions of Lichtenthaler & Lichtenthaler (2009) and Patterson & Ambrosini (2015).
From the socioeconomic variables, the percentage of income from the farm and the hours in lectures and training were the only relations with the existence of a successor. These variables positively influenced the existence of a successor to take over the agricultural business. Succession is related to income differently from that proposed by Bertoni & Cavicchioli (2016a) as they used the total income of the families. This work considered the percentage of family income from farms and suggested that the higher this income, the greater the likelihood of continuity in agriculture. Likewise, the greater the economic well-being, the greater the chance of success in succession (El-Osta et al., 2007). Our result demonstrated that income positively influences succession (Facioni & Pereira, 2015).
Regarding the hours in lectures and training, they are also important to define a successor, confirming the positive effect of professional qualification in succession processes as Heleba et al. (2009) study. In the study, local cooperatives, unions, and associations are the institutions that promote professional training for agricultural workers through courses, lectures, and seminars. This suggests the commitment of these institutions to the issue of farm succession and continuity of farm activity in the region.
The farmer's participation in the cooperative was the only variable that correlated in a positive and relevant way with the discussion of family succession, although most of the sample affirmatively answered they discussed the succession. Possibly cooperative actions have stimulated discussions about family succession since the continuity of cooperatives is also related to the renewal of farms and inclusion of new members (Boessio & Doula, 2016). The importance of institutions to promote the succession debate in families is considered a starting point for the succession process (Keating & Little, 1997), but participating in a cooperative did not influence the social capital of the farmer, contradicting Akahoshi & Binotto (2016).
The SC variable was tested for influence over succession, being positively relevant to define a successor. Symbolic capital, a component of social capital, was significant to succession as proposed by Conway et al. (2016) and Grubbström & Sooväli-Sepping (2012). These results brought some insight about these situations being related to relationships with neighbors and other farmers, feelings on work continuity, and other non-rational impressions as identified by Fischer & Burton (2014). The SC and AC constructs proposed by Micheels & Nolan (2016) were relevant for farm succession. The sample of this work was unique and regional. The variables of the CA and CS constructs that stood out the most were those of formal and informal relationship of farmers with neighbors, suppliers, technicians, lecturers, and cooperatives to obtain information.
According to our results, the correlation analysis showed that most socioeconomic variables were not relevant to explain any of the succession variables. However, the methodological procedure of this study agrees with Bertoni & Cavicchioli (2016b) as it evaluated the influence of socioeconomic characteristics with quantitative data. It is possible that non-quantifiable and non-visible characteristics were neglected, such as cultural, social, or regional phenomena, which probably interfere with the succession processes in this researched group.
The absorptive capacity, acquisition, assimilation, transformation, and exploitation of external knowledge, in addition to inherent to the agricultural practice of commodities, can indicate the possibility of designating the successor as expansionist and flexible to follow the market. If the PAC dimensions (Cohen & Levinthal, 1990;Roberts et al., 2012) had been better developed, the results would be more significant.

Final Considerations Limitations and further research opportunities
This study aimed to identify how social capital, absorptive capacity, and socioeconomic characteristics influence farm succession. Results indicated that the farm succession was influenced by the absorptive capacity, social capital, the percentage of family income (from the farm), participation in courses and lectures, and being a cooperative member. The relevance of social capital to succession, as well as relationships with external people, symbolism, social norms, and trust seemed to be important for the construction of networks of relationships that allowed the farmer to discuss and designate a successor. These factors and characteristics can be fundamental for the discussion and the designation of a successor on the farm. In the same way, symbolic values can motivate farmers concerning the continuity of generations in their farms.
This work was innovative when compared to Micheels & Nolan's (2016) study because it related the existence of a successor to the constructs PAC, RAC, and SC to plan the succession and consequent expansion of farm business. In contrast to Bertoni & Cavicchioli (2016a) and other succession-related works, the results were groundbreaking in the use of CA and CS to predict farm succession, since surveys of family farms require the use of well-established theories and other areas (Suess-Reyes & Fuetsch, 2016). The study was also innovative in seeking structural, categorical, and theoretical correlations with the family discussion about succession, which is a key factor for the success of the process (Keating & Little, 1997).
In agriculture, different pressures shape the actions of farmers, since an imbalance between the maintenance of traditions, the urgency of technological updating, and the need for succession tend to make farmers flexible in their farm planning (Lequieu, 2015). Issues related to the capacity to absorb external knowledge, social and symbolic capital, and generational transference can be fundamental in the perpetuation and productivity of family farming.
The main limitations of this study were related to the size and complexity of the questionnaire, as well as to the replicated socioeconomic issues of Micheels & Nolan (2016). The authors had a different focus on succession and did not address unquantifiable holistic factors. This lack of correlation between succession and several socioeconomic variables raises questions about the possible insipidity of the discussion of succession in the sample studied. Also raises doubts about how these farms are preparing the succession process and if any immensurable variables could influence. We suggested a qualitative approach similar to Bertolozzi-Caredio et al.
(2020) to achieve a more dynamic and multidimensional vision of the succession process and surpass the limitation of the use of quantitative data and correlation analyses. These results offered small possibilities to create hypotheses and in the same way, they could not compare with other hypotheses from previous studies. The suggestion for the method is to develop a study with qualitative data through in-deep interviews or focus groups to deepen these results.
Another aspect is the use of this questionnaire with similar questions from original research without validation in Brazil and this represented a big challenge. As well as the "succession discussion" variable, which was affirmatively answered by respondents but had few correlations with the other variables. We suggested the use of a more simplified questionnaire with categorical variables common to the succession literature and Brazilian characteristics. This would broaden sampling and comparative capacity using qualitative methods with a broader approach to succession phenomena, for example, with case study work in the family business field as discussed by De Massis & Kotlar (2014).
Suggestion for future studies is to seek the use of different variables to compare the levels of succession process with agricultural cooperative members and non-members with theoretical models used here. It is also important to assess whether issues related to the perception of personal father success influence succession and how gender and innovation issues can influence succession in the farms. It is still suggested to explore other family members involved in the succession process, such as the possible successor.
Finally, considering the decrease in the rural population in Brazil (from 54.9% in 1960 to 15.6% in 2010 -Instituto Brasileiro de Geografia e Estatística, 2011), the importance of keeping families in the countryside should be more observed. Initiatives could arise from governments, communities, agricultural extension companies, cooperatives, unions, etc. Programs, courses, training, and events can be planned for farmers and their families to promote the transmission of knowledge, technical learning, and discussions on the succession of farms. These would support succession in rural communities to continue family farming, bringing possibilities to reduce rural migration and to improve innovation in agriculture.