 Family ties, institutions and financing constraints in developing countriesCharilaos Mertzanis Journal of Banking & Finance, 2019, vol. 108, issue C Abstract: The paper uses firm-level data from the World Bank's Enterprise Surveys to explore the impact of the strength of family ties on the individual firms’ financing constraints in 138 developing countries. Financing constraints reflect survey-based perceptions of firms regarding access to finance. The strength of family ties expresses the degree of connection among kin and family and affect the firms’ choice between formal and informal finance. However, family finance is associated with benefits and shadow costs and reflects social preferences. The results show that stronger family ties are associated with higher financing constraints of firms in developing countries, but also appear to exert beneficial effects on financing constraints in smaller countries with smaller firms and in countries with high population density. The results remain broadly robust against various types of sensitivity testing and a country's macroeconomic conditions and its institutional and social environment affect them. Keywords: Financing constraints; Family ties; Informal finance; Institutions; Developing countries (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:108:y:2019:i:c:s0378426619302250 DOI: 10.1016/j.jbankfin.2019.105650 Access Statistics for this article Journal of Banking & Finance is currently edited by Ike Mathur More articles in Journal of Banking & Finance from Elsevier |
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