Investment policy in family controlled firms

Anderson, Ronald C.; Duru, Augustine; Reeb, David M.

doi:10.1016/j.jbankfin.2012.01.018

Cited by 314 publications

(328 citation statements)

References 34 publications

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“…Burkart et al (2003) formalize this argument in a model in which family control substitutes weak formal institutions to resolve the classic ownermanager agency problem. Also, their long-term commitment to the firm lessen agency conflicts with debt holders which induce the firm to undertake safer projects resulting a lower cost of debt financing (Anderson et al, 2003 andAnderson et al, 2012) and both factors tend to reduce the precautionary demand for cash.…”

Section: Family Ownership and Political Connectionsmentioning

confidence: 99%

Corporate cash holdings: Causes and consequences

Amess

Banerji

Lampousis

2015

International Review of Financial Analysis

134

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The considerable growth in corporate cash holdings around the world has prompted scholarly interest. Consequently, there is now a large academic literature examining cash holdings and their impact on corporate outcomes and firm values. This article reviews and synthesizes the literature to offer insight into two primary motives to hold cash: precautionary and agency. We first present a stylized model that explores the trade-off in holding cash between these two motives and then examine empirical studies to determine how existing theories are supported by evidence using data from a variety of countries. In addition, we examine the effectiveness of a variety of corporate governance devices in curtailing cash holdings and also the extent to which these devices offer investors' confidence that cash will not be wasted. Finally, we discuss methodological and measurement issues associated with empirical cash holdings studies. JEL classification: G30; G32

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Section: Family Ownership and Political Connectionsmentioning

confidence: 99%

Corporate cash holdings: Causes and consequences

Amess

Banerji

Lampousis

2015

International Review of Financial Analysis

134

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“…In addition, when breaking long-term investment down into its two components (R&D and capital expenditures), it emerged that FFs prefer investing in physical assets relative to riskier R&D projects than NFFs. Additional tests indicate that FFs receive fewer patent citations per dollar of R&D investment relative to NFFs (Anderson et al, 2012).…”

Section: Ffs Dividends and Investments Policiesmentioning

confidence: 99%

Two models of family firms in dividends and investments policy

Bresciani

Culasso

Giacosa

et al. 2016

GBER

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“…Nevertheless, Chrisman and Patel [58] found that family firms invest less in R&D, and, when they do, these investments are subject to adjustments based on the performance and prior aspiration levels of the family firm. Thus, recent empirical findings point that family ownership negatively influences R&D investment; that is, it decreases the level of R&D intensity (e.g., [13,59]). Moreover, family firms with higher family involvement may pursue family-oriented goals and are willing to sacrifice economic performance in order to preserve family wealth [58], which can lead to severe conflicts with other shareholders or stakeholders.…”

Section: Family Ownership As a Moderating Role In The Multigroup Analmentioning

confidence: 99%

Analysis and Evaluation of the Largest 500 Family Firms’ Websites through PLS-SEM Technique

et al. 2018

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As few studies relate the technical aspects of a corporate website to a firm's turnover, this paper aims to examine how the quality of a corporate website influences social networks and the company's turnover in large family firms. The moderating and mediating effect of social networks on the relationships between website quality and turnover are also tested. In addition, the paper performs a multigroup analysis to analyze the differences between family businesses with low and high family ownership concentration. The sample used in the study, the largest 500 family firms' websites around the globe extracted from The Global Family Business Index compiled by the University of St. Gallen, were analyzed using partial least squares-structural equation modeling (PLS-SEM). The results indicate that both the direct and indirect effect of website quality on turnover and the moderating effect of social networks in the relationship between website quality and turnover were negative and significant. The multigroup analysis reveals some significant differences between both groups. The study contributes to the evaluation of website literature by exploring a new sector of application: family businesses. Moreover, the largest family firms should improve their presence in social networks to increase their sales.

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Investment policy in family controlled firms

Cited by 314 publications

References 34 publications

Corporate cash holdings: Causes and consequences

Corporate cash holdings: Causes and consequences

Two models of family firms in dividends and investments policy

Analysis and Evaluation of the Largest 500 Family Firms’ Websites through PLS-SEM Technique

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