Abstract
There is a widely accepted belief in academia that the continuance of an entrepreneurial family’s legacy is vital for value creation across generations and that intergenerational exchange plays a key role in transmitting this legacy. However, the concept of Schumpeter’s creative destruction, which suggests that value is created through the destruction of the old, conflicts with the idea of preserving a legacy. Additionally, intergenerational exchange is primarily viewed as a locus of conflict and resistance during succession rather than a means of transmitting the family's legacy. To address these contradictions between preserving a legacy and creative destruction, and between transmitive and resistive intergenerational exchange, we propose a model that combines life course theory and social exchange theory and distinguishes between two overlapping periods of life stages in which dyadic exchanges occur. Our model highlights the micro-mechanisms that shape the transmission of a legacy and the regulatory role of intergenerational reciprocity in influencing the legacy to become more creative or destructive. Our model offers a new perspective on how intergenerational exchange can allow a legacy to flow across multiple generations, and that such exchange can enable a family to engage in both creative and destructive behavior to foster their legacy’s value.