Is family control relevant for corporate cash holding policy?

• Autores: Rodrigo F. Durán Gonzales, Mª Belén Lozano García, Serhat Yaman
• Localización: Journal of Business Finance & Accounting, ISSN-e 1468-5957, Vol. 43, Nº. 0, 2016, págs. 1325-1360
• Idioma: inglés
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• Dialnet Métricas: 1 Cita
• Resumen

  • This empirical research examines the effect of family control on firms' cash holding policy. Using a sample of Western European firms, we confirm the precautionary motive for holding cash as family-controlled firms' desire to perpetuate the family legacy for future generations motivates them to accumulate more cash than their non-family counterparts. We also show that, given family-controlled firms' long-term perspective, they focus on cash flow volatility rather than cash flow level. Finally, the relation between financing constraints and cash holdings is not homogeneous: financially constrained family-controlled firms hold higher levels of cash than financially constrained non-family firms. Overall, these results suggest that family firms' cash holding policy is the result not of a specific financial outcome but rather on the strategic objectives of the firm. [ABSTRACT FROM AUTHOR]