EconStor >
Koç University - TÜSİAD Economic Research Forum, Istanbul >
Working Paper Series, Koç University - TÜSİAD Economic Research Forum >

Please use this identifier to cite or link to this item:
Title:Family control and financing decisions PDF Logo
Authors:Crocci, Ettore
Doukas, John A.
Gonenc, Halit
Issue Date:2010
Series/Report no.:TÜSİAD-Koç University Economic Research Forum working paper series 1004
Abstract:Empirical studies examining the financing decisions of the firm focus exclusively on publicly held firms, not family-controlled firms despite their economic importance. This study investigates the external financing behavior of family-controlled firms, using a comprehensive sample of 777 large European firms during the period 1998 to 2008. We document that, unlike nonfamily-controlled firms, the external financing decisions of family-controlled firms are influenced by control incentives and information asymmetry considerations. We find that family firms have a strong preference for debt financing, a noncontrol diluting security, while they are more reluctant to raise capital through equity offerings in comparison to nonfamily firms. We also find that credit markets, view family firms as more risk-averse and that family firms invest more in low-risk (fixed-asset capital expenditures (CAPEX)), than in high-risk investments (R&D expenditures) confirming their non-risk seeking behavior.
Subjects:family firms
financing decisions
equity issues
debt issues
capital structure
Document Type:Working Paper
Appears in Collections:Working Paper Series, Koç University - TÜSİAD Economic Research Forum

Files in This Item:
File Description SizeFormat
638346320.pdf500.36 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.