6533b81ffe1ef96bd1278e02

RESEARCH PRODUCT

Financial Structure of the Family Business: Evidence From a Group of Small Spanish Firms

José López-graciaSonia Sánchez-andújar

subject

050208 financeFamily business05 social sciencesControl (management)Financial ratioFinancial systemSample (statistics)Rest (finance)Pecking order theory0502 economics and businessBusiness Management and Accounting (miscellaneous)Demographic economicsBusinessEmpirical evidence050203 business & managementFinancePanel data

description

This article presents empirical evidence on the determinants of the financial behavior of small family businesses and their differences from nonfamily small businesses. Taking into account two consolidated financial approaches, (1) the trade-off theory and (2) the pecking order theory, several hypotheses on the financial behavior of both groups of firms have been tested. By estimating these models through panel data methodology, using a sample of Spanish family businesses together with another control group of nonfamily businesses, we have obtained results confirming that a business's family nature does lead it to employ financial policy different from the rest of businesses. Furthermore, results indicate that growth opportunities, financial distress costs, and internal resources appear to be the main factors that differentiate the financial behavior of family firms from their nonfamily counterparts.

yearjournalcountryeditionlanguage
2007-12-01Family Business Review
https://doi.org/10.1111/j.1741-6248.2007.00094.x