Transparency and financing choices of family firms

Chen, Tai-Yuan and Dasgupta, Sudipto and Yu, Yangxin (2014) Transparency and financing choices of family firms. Journal of Financial and Quantitative Analysis, 49 (2). pp. 381-408. ISSN 0022-1090

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While recent literature documents that U.S. family firms differ markedly from their nonfamily counterparts, there is a paucity of evidence on how these firms differ in terms of their cost of capital or financial structure. In this paper, we show that family and nonfamily firms differ in their debt maturity and leverage ratios in a manner consistent with the higher expropriation potential of family firms. Moreover, while more transparency causes both family and nonfamily firms to increase the maturity structure of their debt and reduce leverage ratios, the effects are stronger for family firms.

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Journal Article
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Journal of Financial and Quantitative Analysis
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30 Jul 2015 10:52
Last Modified:
22 Nov 2022 01:59