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Change in Illiquidity of Family Firms with Institutional Pressure: Evidence from India

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  • Chakrabarti, Amit

    (Indian Institute of Management, Visakhapatnam, India)

  • Krishnan, Kaveri

    (Indian Institute of Management, Visakhapatnam, India)

Abstract

This paper investigates the impact of the family business on illiquidity in an emerging market and how it evolves with regulatory changes. The study uses panel data multiple regression on a sample of 25,418 observations on 3,606 firms from India within nine years from 2006 to 2014. The study finds that family firms have significantly higher illiquidity compared to non-family firms. Moreover, family businesses have successfully resisted the institutional pressure to decrease illiquidity and have also defied these coercive pressures to increase the illiquidity of family businesses finally. The study also found heterogeneity in the behaviour of family businesses based on their ownership characteristics.

Suggested Citation

  • Chakrabarti, Amit & Krishnan, Kaveri, 2021. "Change in Illiquidity of Family Firms with Institutional Pressure: Evidence from India," American Business Review, Pompea College of Business, University of New Haven, vol. 24(2), pages 173-197, November.
    • Handle: RePEc:ris:ambsrv:0043
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    More about this item

    Keywords

    Stock Liquidity; Emerging Economy; Family Firms; Market Reforms;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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