Abstract: To address the dual pressures of inheritance and innovation while achieving the dual objectives of preserving family bonds and enhancing corporate performance, second-generation successors in family businesses must develop the capacity for “inward action”, that is, forging an entrepreneurial identity that commits to the family enterprise while embracing innovation and development. This paper examines the identity development process and mechanisms of second-generation successors, starting from their entry into the family business and drawing on multiple case studies. Findings reveal that successors initially accept the “successor identity” driven by foundational motivations of self-reinforcement and relationship maintenance. They then undergo a three-stage process (identity maintenance, identity validation, and identity integration), ultimately committing to the “entrepreneurial identity of the second generation.” This process is triggered by parental empowerment behaviors, develops through parents providing specialized and emotional empowerment tailored to different developmental stages, and is completed through parental identity transfer and the second generation’s innovative actions. The underlying mechanism driving parental behaviors in second-generation identity development is the individual’s pursuit of identity unity and consistency, coupled with goal alignment between generations based on emotional connection. This study enriches identity theory within the unique context of family enterprises, deepens research on successor development guided by “inward action,” and provides a systematic theoretical foundation for succession practices in family businesses.

Key words: second-generation entrepreneur, family business successor, identity development, inter-generational inheritance