Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/53376
Authors: 
Panunzi, Fausto
Ellul, Andrew
Pagano, Marco
Year of Publication: 
2009
Series/Report no.: 
Nota di lavoro // Fondazione Eni Enrico Mattei: Institutions and markets 06.2009
Abstract: 
Entrepreneurs may be constrained by the law to bequeath a minimal stake to non-controlling heirs. The size of this stake can reduce investment in family firms, by reducing the future income they can pledge to external financiers. Using a purpose-built indicator of the permissiveness of inheritance law and data for 10,245 firms from 32 countries over the 1990-2006 interval, we find that stricter inheritance law is associated with lower investment in family firms, while it leaves investment unaffected in non-family firms. Moreover, as predicted by the model, inheritance law affects investment only in family firms that experience a succession.
Subjects: 
Succession
Family Firms
Inheritance Law
Growth
Investment
JEL: 
G32
Document Type: 
Working Paper

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