Change in Illiquidity of Family Firms with Institutional Pressure: Evidence from India

Amit Chakrabarti () and Kaveri Krishnan
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Amit Chakrabarti: Indian Institute of Management, Visakhapatnam, India
Kaveri Krishnan: Indian Institute of Management, Visakhapatnam, India

American Business Review, 2021, vol. 24, issue 2, 173-197

Abstract: This paper investigates the impact of the family business on illiquidity in an emerging market and how it evolves with regulatory changes. The study uses panel data multiple regression on a sample of 25,418 observations on 3,606 firms from India within nine years from 2006 to 2014. The study finds that family firms have significantly higher illiquidity compared to non-family firms. Moreover, family businesses have successfully resisted the institutional pressure to decrease illiquidity and have also defied these coercive pressures to increase the illiquidity of family businesses finally. The study also found heterogeneity in the behaviour of family businesses based on their ownership characteristics.

Keywords: Stock Liquidity; Emerging Economy; Family Firms; Market Reforms (search for similar items in EconPapers)
JEL-codes: D10 G33 (search for similar items in EconPapers)
Date: 2021
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