Motivated by the growing attention to the financing decisions of family firms, this review brings together the two highly relevant research fields of family business and finance. This study critically reviews 131 articles on financing decisions in family businesses, published between 1977 and 2016 in 64 finance and management journals. We develop a state of the art on family business financing literature and present a model to guide extant and future research by identifying gaps across the theoretical perspectives and across context-specific elements such as family business heterogeneity and country-specific factors.

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This paper contributes to our understanding of dividend payout in privately held familycontrolled firms by adopting a family business professionalization perspective. Based on a sample of 492 small to medium-sized family-controlled firms, the results show that professionalized family firms pay higher dividends to their shareholders than less professionalized firms. In particular the use of financial control systems, nonfamily involvement in governance systems, and the use of human resource control systems have a positive significant impact on the average level of dividend payout.

This paper aims to investigate the antecedents of formal human resource management (HRM) in private family firms. Specifically, we adopt a socio-emotional wealth perspective to predict the relationship between family-centered noneconomic (FCNE) goals and formal HRM practices. In addition, we rely on the extension of the behavioral theory, i.e., the attention-based view of the firm, to understand the moderating effect of family governance practices (FGPs) on the relation between FCNE goals and formal HRM practices. Based on analyses of a sample of 293 Belgian privately-held family small and medium enterprises, we find that the pursuit of FCNE goals is associated with less formal HRM practices. In addition, simultaneously engaging in FGPs while pursuing FCNE goals reverses this negative effect.

Purpose By investigating the use of formal compensation practices in family small- and medium-sized enterprises (SMEs), the purpose of this paper is to provide important new insights in these issues for academics, as well as family business practitioners, prospective applicants and financiers of family businesses. Moreover, this study includes a contingency that allows to explore heterogeneity across family businesses in their use of formal compensation practices: the CEO type. Design/methodology/approach A survey of 124 small- and medium-sized Belgian family businesses to explore the use of formal compensation practices is analyzed by the author. Findings The results support the hypothesis that family firms with a family CEO adopt significantly less formal compensation practices than their counterparts that are led by a non-family CEO. Research limitations/implications Generalizing the findings of this study must be taken with care, as the findings are based on a cross-sectional sample of family SMEs in one country, Belgium. Future research can build on these findings with studies on larger samples in other countries. Practical implications This study may be interesting for family business practitioners and consultants, as it provides insight in the actual use of formal compensation practices that are recommended as a best practice in numerous practitioner handbooks. Also, the results of this study might be important for prospective applicants and financiers, since the compensation system is an important communication device to signal legitimacy to external stakeholders. Originality/value Compensation issues are among the main challenges SMEs, especially family firms, face. Despite the clear importance of this matter, academic interest has been rather limited. This paper therefore displays sound descriptive survey results and empirically investigates the determinants of the use of formal compensation practices in Belgian family SMEs by distinguishing between different types of family businesses.