Financial Conservatism in Family Businesses: A Double-edged Sword

Conservatisme Financier des Entreprises Familiales: un Biais à Double Tranchant

Hamza Nidaazzi () and Hind Hourmat Allah
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Hamza Nidaazzi: UCA - Université Cadi Ayyad [Marrakech]
Hind Hourmat Allah: UCA - Université Cadi Ayyad [Marrakech]

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Abstract: Behavioral finance, a thriving domain within management science, is garnering increasing interest. However, the concept of family firms' financial conservatism in Morocco has been relatively unexplored. To facilitate the initiation of a discourse on this issue, we found it opportune to delve into and analyze this aspect. In order to open a debate on this problem, the aim of this paper is to explore and analyze the junction that can exist between financial strategy and conservatism in the family business. Using a qualitative study, this paper explores the points of view, perceptions, and behaviors of conservative managers and owners of twelve Moroccan Family firms. In contrast to the existing literature, results show that conservative family firms are profitable, have high levels of cash flow, and face lower costs in times of crisis. Our analyses also shows that financial conservatism is only threatening if it is forced due to financial constraints.

Keywords: Family Business; Conservatism; Financial Policy; Behavioral Finance; Sustainability; Entreprise Familiale; Conservatisme; Politique Financière; Finance Comportementale; Pérennité. (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-ara, nep-cfn and nep-mac
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Published in Revue Française d'Economie et de Gestion , 2024, 45 (1), pp.422-442. ⟨10.5281/zenodo.10853385⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04518830

DOI: 10.5281/zenodo.10853385

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