Riding out of a financial crisis: The joint effect of trust and corporate ownership
Mario Daniele Amore and
Mircea Epure ()
Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra
We study how generalized trust shapes the ability of firms with different ownership forms to obtain trade financing and perform during a financial crisis. Exploiting geographic variations in trust across Italian regions and the occurrence of the 2008-09 financial crisis in a difference-indifferences setting, we show that generalized trust makes family firms less able to obtain trade financing during the crisis. This finding maps into performance results: trust alleviates the negative effect of a crisis for non-family firms, while it aggravates the negative effect for family firms. This latter result depends crucially on a firmâ€™s corporate governance: trust does not harm family firms whose board is open to non-family directors. Collectively, our findings illustrate how culture interacts with corporate attributes in shaping a firmâ€™s prospects.
Keywords: trust; trade financing; Family firms; financial crisis; performance (search for similar items in EconPapers)
JEL-codes: G32 G34 Z10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn and nep-soc
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Working Paper: Riding Out of a Financial Crisis: The Joint Effect of Trust and Corporate Ownership (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1733
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