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The influence of family ownership dispersion on debt level in privately held firms

Author

Listed:
  • Silvia Bacci

    (University of Perugia)

  • Alessandro Cirillo

    (University of Foggia)

  • Donata Mussolino

    (University of Naples Federico II)

  • Simone Terzani

    (University of Perugia)

Abstract

The aim of this article is to investigate the financing behavior of privately held firms along the dispersion of family ownership. Drawing on the socio-emotional wealth perspective, we argue that debt levels are contingent on the degree of ownership dispersion among family members. Based on a sample of 2451 observations, in a 10-year time frame, our results reveal the existence of an inverted U-shaped relationship between debt level and intra-family ownership dispersion. We demonstrate that this relationship is moderated by the generational involvement that inverts it in later generations.

Suggested Citation

  • Silvia Bacci & Alessandro Cirillo & Donata Mussolino & Simone Terzani, 2018. "The influence of family ownership dispersion on debt level in privately held firms," Small Business Economics, Springer, vol. 51(3), pages 557-576, October.
    • Handle: RePEc:kap:sbusec:v:51:y:2018:i:3:d:10.1007_s11187-017-9930-2
    DOI: 10.1007/s11187-017-9930-2
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    2. Cirillo, Alessandro & Maggi, Barbara & Sciascia, Salvatore & Lazzarotti, Valentina & Visconti, Federico, 2022. "Exploring family millennials’ involvement in family business internationalization: Who should be their leader?," Journal of Family Business Strategy, Elsevier, vol. 13(3).
    3. Martínez Bobillo, Alfredo & Rodríguez Sanz, Juan Antonio & Tejerina Gaite, Fernando, 2021. "Explanatory and predictive drivers of entrepreneurial orientation and innovation capacity: Evidence from family enterprises," Cuadernos de Gestión, Universidad del País Vasco - Instituto de Economía Aplicada a la Empresa (IEAE).
    4. Cirillo, Alessandro & Muñoz-Bullón, Fernando & Sánchez-Bueno, María J. & Sciascia, Salvatore, 2022. "Employee downsizing and sales internationalization strategy in family firms," Journal of Family Business Strategy, Elsevier, vol. 13(2).
    5. Virginia Blanco-Mazagatos & M. Elena Romero-Merino & Marcos Santamaría-Mariscal & Juan Bautista Delgado-García, 2024. "One more piece of the family firm debt puzzle: the influence of socioemotional wealth dimensions," Small Business Economics, Springer, vol. 63(2), pages 831-849, August.
    6. Antonia Schickinger & Alexandra Bertschi-Michel & Max P. Leitterstorf & Nadine Kammerlander, 2022. "Same same, but different: capital structures in single family offices compared with private equity firms," Small Business Economics, Springer, vol. 58(3), pages 1407-1425, March.
    7. Anneleen Michiels & Jelle Schepers & Pieter Vandekerkhof & Alessandro Cirillo, 2021. "Leasing as an Alternative Form of Financing within Family Businesses: The Important Advisory Role of the Accountant," Sustainability, MDPI, vol. 13(12), pages 1-17, June.
    8. Feito-Ruiz, Isabel & Menéndez-Requejo, Susana, 2022. "Debt maturity in family firms: Heterogeneity across countries," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 81(C).
    9. Doucet, Pablo & Requejo, Ignacio, 2022. "Financing constraints and growth of private family firms: Evidence from different legal origins," Finance Research Letters, Elsevier, vol. 44(C).
    10. Wang, Joyce C. & Zhao, Yiyi & Sun, Sunny L. & Zhu, Jigao, 2023. "Female-friendly boards in family firms," Journal of Business Research, Elsevier, vol. 157(C).
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    More about this item

    Keywords

    Family ownership dispersion; Debt level; Intergenerational stage; Socio-emotional wealth; Capital structure; Panel data;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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