Family involvement and new venture debt financing

Chua, Jess H. and Chrisman, James J. and Kellermanns, Franz and Wu, Zhenyu (2011) Family involvement and new venture debt financing. Journal of Business Venturing, 26 (4). pp. 472-488. ISSN 0883-9026

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New ventures often require debt financing but face difficulties convincing lenders of their creditworthiness because of agency problems. Researchers have shown that social capital can help small firms reduce lenders' agency concerns but new ventures do not yet have their own social capital. We propose that family involvement increases a venture's ability to borrow family social capital for the purpose of obtaining debt financing. Empirical tests with 1267 new ventures suggest that family involvement directly and indirectly improves a new venture's access to debt financing.

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Journal Article
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Journal of Business Venturing
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16 May 2013 10:14
Last Modified:
21 Nov 2022 23:48