Financing constraints and growth of private family firms: Evidence from different legal origins

Pablo Doucet and Ignacio Requejo

Finance Research Letters, 2022, vol. 44, issue C

Abstract: We investigate whether family control informs the extent to which business growth depends on internal finance. Our results are based on a sample of private firms from two regions in which family ownership prevails: Western Europe and East Asia. The countries covered nonetheless differ from each other in their legal origin. We find that the growth of private family firms is less reliant on internal finance. The beneficial effect of family control is especially pronounced in countries where external lenders are more protected. Family control and a protective institutional environment therefore complement each other to facilitate business growth.

Keywords: Business growth; Financing constraints; Family control; Institutional environment; Private firms (search for similar items in EconPapers)
JEL-codes: D25 G32 K40 L25 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:44:y:2022:i:c:s154461232100115x

DOI: 10.1016/j.frl.2021.102034

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