The impact of family control and size on capital structure decisions

• Joaquim J. S. Ramalho ^[1] ; Rui M. S. Rita ^[2] ; Jacinto Vidigal da Silva ^[1]
  1. [1] Universidade de Évora

     Universidade de Évora

     Senhora da Saúde, Portugal

     
  2. [2] Instituto Politecnico de Setubal

     Instituto Politecnico de Setubal

     Setúbal (Santa Maria da Graça), Portugal

     
• Localización: Creando nuevas oportunidades en un entorno de incertidumbre. Creating new opportunities in an uncertain environment: XXVI Congreso anual AEDEM. Universidad de Barcelona, 5, 6 y 7 de junio de 2012 / coord. por Anna María Gil Lafuente, 2012, ISBN 978-84-7356-853-1
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • In this paper we examine the following three hypotheses about which there is some lack of research in the financial literature: i) family ownership is a relevant factor in determining firms’ financing decisions; ii) family ownership has a different influence on the factors that determine whether or not a firm issues debt are different from those the determine how much debt to issues; and iii) the differentiated influence of the family ownership on the decision to use debt and on its proportion depends on firm size. Using a binary choice model to explain the probability of the firm using debt and a fractional data model to explain the proportion of debt issued, we find strong support for the first and third hypotheses. Particularly, we find that: i) depending on size, family ownership influences positively the probability of using debt; ii) depending on size and the use of debt, family ownership influences positively the proportion of debt used