Building on Institutional theory and Signaling theory, integrated with the socioemotional wealth (SEW) approach, we studied the effect of earnings management (EM) practices on a firm's Corporate Social Responsibility (CSR) disclosure behavior. In so doing, we analyzed a sample of 226 non-financial, family and non-family listed firms for the period, 2006-2015. Our results suggest that family firms, in instances of downward earnings management, are more prone to diverting attention from these practices by means of CSR disclosure, compared to non-family firms, although the level of family ownership exerts a moderating effect. Moreover, we found that a firm's visibility, in terms of size, significantly enhances this behavior and that the effect is higher for family firms.

Abstract:We analyze the largely unexplored differences in sustainability reporting within family businesses using a sample of 230 non-financial Italian listed firms for the period 2004-2013. Drawing on legitimacy theory and stakeholder theory, integrated with the socio-emotional wealth (SEW) approach, we study how family control, influence and identification shape a firm's attitude towards disclosing its social and environmental behavior. Our results suggest that family firms are more sensitive to media exposure than their non-family counterparts and that family control enhances sustainability disclosure when it is associated to a family's direct influence on the business, by the founder's presence on the board or by having a family CEO. In cases of indirect influence, without family involvement on the board, the level of family ownership is negatively related to sustainability reporting. On the other hand, a formal identification of the family with the firm by business name does not significantly affect social disclosure.

Purpose\ud This article studies firms’ attitudes to using sustainability reporting in order to facilitate the raising of external capital and the effect of the ultimate controlling owner on disclosure. \ud Design/methodology/approach\ud A disclosure index is constructed on the basis of sustainability reports, for a sample of 230 Italian listed firms. Empirical analysis is based on panel data models. \ud Findings\ud Firms are more prone to disclose when they are planning to issue equity/bonds. Family control does not affect disclosure in the case of bond issues but it has a moderating effect in the case of equity issuance. A family CEO, increasing the family’s sense of identification with the business, improves disclosure.\ud Research limitations/implications\ud Family ownership is the most viable measure to assess its socioemotional-wealth. This catches only the dimension related to family control and influence but it doesn’t take into account other aspects of SEW. Our study focuses on the relation between disclosure and financing choices, it doesn't analyze the relationship between disclosure and the success of equity/bond issues.\ud Practical implications\ud Family firms should improve their sustainability reporting, especially for firms operating in environmentally-sensitive industries. Sustainability reports could play an effective role as a control mechanism in a firm’s behavior towards the environment, society, employees and consumers.\ud Originality/value\ud The paper contributes to the studies on sustainability, showing that the nature of ultimate controlling owners and firms’ financing decisions affect disclosure. Moreover, it contributes to family firms literature shedding light on the effect of the family control and sense of identification with the firm on disclosure

Purpose – This paper aims to examine the determinants of capital structure of unlisted firms and how family governance-related factors impact on them. Design/methodology/approach – The authors analyze the relation between a set of capital structure determinants and leverage in a unique dataset of 3,006 family and non-family Italian medium-large firms (26,210 obs.), and a control sample of 2,730 small firms (14,780 obs.), using cross-section and panel procedures during 2001-2010. Findings – Capital structure choices of medium-large family firms are linked to balance-sheet variables not used in previous studies, i.e. net working capital and capital turnover, and are significantly affected by the need to maintain control and influence, a relevant dimension of family socioemotional wealth. Family firms are more levered than non-family firms, but the difference is economically and statistically significant only for medium-large companies. The presence of the family in active management increases leverage, as the family endowment in the firm is higher. Research limitations/implications – This research could be developed through an international comparison to check the influence of country-related regulatory issues and of national cultural aspects on family control and influence. Practical implications – The results can give public authorities important insights in order to facilitate firms funding specially in the current critical economic scenario and provide managers useful suggestions to support financial decisions. Originality/value – To the best of the authors' knowledge, this is the first paper to explore the financial choices of a large dataset of medium-large private firms in a bank-based economy.

CSR reporting is a relevant part of a firm's dialogue with stakeholders, therefore it is of interest to study whether this form of communication is an effective tool for gaining customers' support. This paper addresses this issue by comparing the effect of CSR disclosure on family and non-family firms' revenues. In doing so, we analyze a sample of Italian non-financial listed firms and we control for the effect of visibility to stakeholders, governance characteristics, risk, and several accounting variables. We find that CSR reporting has a significant effect on revenues when a company is characterized by consumer proximity, in terms of product or services visibility for consumers, but that the effect is positive for family firms and negative for non-family companies.

The authors investigate the question of which qualitative characteristics are likely to explain the survival of family firms in case of financial distress and whether these variables improve the explanatory power of quantitative variables in clarifying the different probability of distress between family and non-family firms. They focus their attention on the impact of the controlling owner and, using the Socioemotional Wealth theory (SEW), study the role of the family involvement in mitigating or accentuating the likelihood of distress. Using a dataset of 1,137 Italian family and non-family firms during 2004-2013, the authors found that family firms are significantly less likely to incur distress than non-family firms. The board dimension and the number of family members on board affect the probability of distress even controlling for some firm risk characteristics such as beta and ROA volatility, and there is also evidence of a gender mitigating effect in case of a female CEO.

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