Family Business

Kenyon-Rouvinez, Denise; Ward, John L.

doi:10.1057/9780230287730

Cited by 31 publications

(27 citation statements)

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“…These results corroborate these of Lopez-Gracia and Sanchez-Andujar (2007) which showed that family firms follow an indebtedness target ratio more quickly than nonfamily firms. Following such an indebtedness level can be explained by the willingness of family firms to maintain an indebtedness ratio guaranteeing they can keep family control over the firm (Kenyon-Rouvinez & Ward, 2004). The value obtained for each parameter cannot allow us to explain the firm's financial policy by the two main funding models considered in this research.…”

Section: Results and Interpretationsmentioning

confidence: 99%

“…Indeed, the motivations having induced a deleveraging in family businesses could find their origins in the willingness to minimise taxation. Besides, growth in financial independence could also find an interpretation in the family firms' willingness to minimise their financial distress costs allowing them to perpetuate their activities in a period of economic contraction (Ward, 1988;Kenyon-Rouvinez & Ward, 2004).…”

Section: Resultsmentioning

confidence: 99%

“…Even if the components of the financial structure have been identified to clarify their financing methods (Gallo & Vilaseca, 1996;Colot & Croquet, 2007), few studies have analysed the subject using a comparative methodology (Lopez-Gracia & Sanchez-Andujar, 2007). However, such characteristics of family firms as risk aversion (Gallo & Vilaseca, 1996;DeAngelo & DeAngelo, 2000), the willingness to transmit the business (Colot, 2010) and the preservation of family control (Hirigoyen, 1982;Kenyon-Rouvinez & Ward, 2004) have an influence on their financial behaviour. Hence, the main purpose of this paper will be to check if family firms develop specific types of financial behaviour compared to non-family firms.…”

Section: Introductionmentioning

confidence: 99%

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Pecking-Order or Static Trade-off Theory in Family Firms? Evidence from Belgium

Bauweraerts¹,

Colot²

2012

IBR

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The purpose of this paper is to investigate whether a difference can be stated in the family firms' financial choices. Using the Shyam-Sunder and Myers model, our research focus on the financial behaviour of family and non-family privately held firms in Belgium. Out of a sample of 210 privately held firms for the period 2002-2010, panel data methodology is employed to estimate Pecking-Order and Static Trade-off models. Our results show that although neither Pecking Order nor Static Trade-off Theory seems to apply to non-family firms, family firms are more likely to adopt an indebtedness target ratio. Moreover, the introduction of an allowance for corporate equity on the Belgian market is also taken into account. Our results indicate that such a mechanism seems to have an influence on the family firms funding choices.Keywords: family firm, debt, financial structure, capital structure, financial behavior, allowance for corporate equity IntroductionIn the literature relative to the financial structure of the firm, two theories are regularly confronted. The theory of Modigliani and Miller (1958) revealed the neutrality of the financial structure under the hypothesis of a perfect market. By introducing corporate income tax, Modigliani and Miller (1963) demonstrated the superiority of firms using debts, since the take advantage of the deductibility of interest expenses. Nevertheless, this model was criticized because it did not take into account the costs of distress within the firm. In order to fill this gap, Static Trade-off Theory was built to develop a model based on a costs-profits analysis resulting from the issuance of debt (Krauss & Litzenberger, 1973). This theory assumes the existence of a target indebtedness ratio equalling the profits of the deductibility of interest expenses and the costs of distress of the firm. Besides, an alternative theory was proposed by Myers and Majluf (1984): the Pecking-Order Theory. Under this theory, due to information asymmetry between managers and external investors, self-financing would be preferred to debts and stocks issuance by the managers.

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Section: Results and Interpretationsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Pecking-Order or Static Trade-off Theory in Family Firms? Evidence from Belgium

Bauweraerts¹,

Colot²

2012

IBR

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“…This pattern of a family, combined with business development and management, who operate in different ways at different times and in different businesses suggests the focus should be a business family rather than a family business (Kenyon-Rouvinez, 2001;Dhaliwal, 2006). In this context a tentative definition of a business family is of a family with a distinct and significant pattern of entrepreneurial behaviour alongside patterns of business start-up and development, with an important element of internal family business related interaction and support during those processes.…”

Section: Current Pattern Of Business Ownershipmentioning

confidence: 99%

Social networking in family businesses in a local economy

Seaman

McQuaid

Pearson

2017

Local Economy: The Journal of the Local Economy Policy Unit

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Small, family owned businesses make considerable contributions to local economies. The importance of social networks to their development is also well established. This paper explores the different types of distinct, but interlocking, social networks of a rural business family, focussing upon the interaction between family, business and friendship networks. It presents a multi-rational logic framework to consider how the differing logics of each of these network influences the development and behaviour of family businesses. The changes in networks over time and between generations of the family are also analysed and gaps or structural holes within the networks identified. Implications for research and policy are then set out.

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“…Some of them pursue their activity since the sixties although they had to cope with turbulences such as economic recession or political turmoil (Kenyon-Rouvinez & Ward, 2004;James, 2006). Despite a statement of sustainability in family firms, the origins of their longevity are not well known.…”

Section: Family Involvement Performance and The Crisismentioning

confidence: 99%

How Do Private Family Firms Face the Crisis? Empirical Evidence from Belgium

Bauweraerts¹

2013

IBR

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Whereas listed family firms have already received great attention concerning the effect of the crisis on performance, few studies focus on private family firms acting in a hostile environment. This paper tries to fill this gap by investigating how the financial and economic crises affect the relationship between family involvement and performance. This research is led on the Belgian market and based on panel data collected on the period 2002-2011. Multiple regression analysis and Heckman two-steps method show that private family firms exhibit greater performance during the crisis. These results seem to confirm that family involvement enhances potential of resilience in private firms so that they outperform their non-family peers during periods of crisis.

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Family Business

Cited by 31 publications

References 0 publications

Pecking-Order or Static Trade-off Theory in Family Firms? Evidence from Belgium

Pecking-Order or Static Trade-off Theory in Family Firms? Evidence from Belgium

Social networking in family businesses in a local economy

How Do Private Family Firms Face the Crisis? Empirical Evidence from Belgium

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