Capital Structure Adjustment in Brazilian Family Firms

Kayo, Eduardo Kazuo; Brunaldi, Eduardo Ottoboni; Aldrighi, Dante Mendes

doi:10.1590/1982-7849rac2018170004

Cited by 17 publications

(13 citation statements)

References 53 publications

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“…The BB method, which is considered more reliable, shows that the companies' capital structure is adjusted by 56% p.a., while the result of the AB method shows the firms adjusting 83% of their leverage each period. This AB speed of adjustment is more than double that of the studies that analyze the adjustment in other countries, such as those of Flannery and Rangan (2006) and Huang and Ritter (2009), but differs less from Brazilian studies, such as that of Kayo, Brunaldi, and Aldrighi (2018), which found, for nonfamily firms, a speed of adjustment of 48% p.a. with the BB method and 75% p.a.…”

Section: Application Of the Modelcontrasting

confidence: 54%

Leverage and investment opportunities: the effect on high growth firms

Oliveira

Kayo

2020

Rev. contab. finanç.

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The objective of this paper is to investigate if the high growth of a firm results in a reduction in its debt levels. This is expected to happen for firms that experience a positive idiosyncratic shock to their growth opportunities, which would affect their cash flow and profitability. Although the relationship between growth opportunities (e.g., Tobin’s Q) and capital structure has already been widely discussed from a conceptual viewpoint, there are still important empirical gaps, particularly due to the endogeneity of the first variable. This paper seeks to minimize these problems by operationalizing the concept of idiosyncratic technological shocks. This issue is relevant because the negative relationship between growth and leverage may indicate that for the most efficient companies there will be a reduction in bankruptcy cost and a reduction in agency costs for the least efficient companies. This paper contributes to the development of studies in the area by demonstrating the inverse relationship between growth and leverage, with the model and the variable that represents the positive shocks experienced by companies. The dynamic panel method enables an analysis of the variation in debt in relation to the variation in value using the first differences and controlling the lagged debt effect. To apply the model, we used data from Brazilian companies, covering 1995 to 2016. The main results show that the greater the ratio between the firm’s growth opportunities and its industry growth opportunities, the lower its leverage indicators. The complementary results suggest that less leveraged firms have this negative relationship to an even stronger degree.

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Section: Application Of the Modelcontrasting

confidence: 54%

Leverage and investment opportunities: the effect on high growth firms

Oliveira

Kayo

2020

Rev. contab. finanç.

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“…In contrast, higher leverage ratios have been found for family firms in Australia (Setia-Atmaja, 2010;Setia-Atmaja, Tanewski, & Skully, 2009), Brazil (Kayo, Brunaldi, & Aldrighi, 2018), Canada (King & Santor, 2008), Egypt (ElBannan, 2017), Italy (Morresi & Naccarato, 2016), Poland (Jewartowski & Kałdo nski, 2015), Thailand and Indonesia (Bunkanwanicha, Gupta, & Rokhim, 2008;Wiwattanakantang, 1999), the United States (Keasey, Martinez, & Pindado, 2015), and multicountry samples (Croci, Doukas, & Gonenc, 2011;Ellul, 2009). In this study, we conduct a meta-analysis examining the relationship between family firm status and leverage ratio.…”

mentioning

confidence: 97%

Public family firms and capital structure: A meta‐analysis

Hansen

Block

2021

Corporate Governance

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Research Question/Issue: In this study, we examine the impact of family firm status on publicly listed firms' leverage ratios. Furthermore, we investigate the moderating role of a country's institutional setting, especially its shareholder and creditor rights, on this relationship.Research Findings/Insights: Conducting a meta-analysis on 869 effect sizes from 613 studies, we find an overall slightly negative but significant relationship between family firm status and leverage. Our results reveal a large amount of heterogeneity and considerable mean effect size differences across the 48 countries included in the study. The results of our meta-regression analysis reveal significant moderating effects of shareholder and creditor rights on family firms' capital structure decisions.Whereas stronger shareholder rights have a positive impact on family firm leverage, stronger creditor rights have a negative impact.Theoretical/Academic Implications: Our study combines the two dominating and competing views on family firm leverage. On the one hand, the overall lower leverage ratio of family firms confirms the risk-aversion view of family firms. On the other hand, control considerations also have a significant impact on leverage ratios, as family firms adjust their capital structure dependent on shareholder and creditor rights in their home country. Our study highlights the importance of the institutional setting on firms' financing patterns.Practitioner/Policy Implications: The results suggest a significant impact of a country's institutional setting in general, and its strength on shareholder and creditor rights in particular, on family firms' capital structure decisions. Control considerations result in a strategic use of debt financing that ensures the owner family's dominant position in the firm and prevents potentially harmful conflicts with minority shareholders or creditors.

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“…Esse resultado coaduna ainda com as evidências de Segura, Formigoni, et al (2013) e com Segura, Oliveira, et al (2013), que constataram que entidades com influência familiar na gestão são menos endividadas do que as companhias não familiares. Diverge, entretanto, do posicionamento recente de Kayo et al (2018), que defendem que empresas familiares são mais confiantes e, para tanto, mais propensas a riscos.…”

Section: Discussão E Análise Dos Resultadosunclassified

Influência da propriedade familiar na estrutura e custo de capital das empresas brasileiras

Wildner

Oro

Petry

2020

Rev. Cat. Cien. Cont.

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Este estudo mensura a influência da propriedade na estrutura de capital das empresas familiares, comparando com as empresas não familiares, listadas na B3. As relações existentes entre estas variáveis são alvo de discussões e não há na literatura um consenso quanto à influência exercida pela gestão familiar na estrutura de capital. Para tanto, este estudo caracteriza-se como descritivo com abordagem quantitativa. Os dados foram resgatados da base de dados Economatica e a amostra consistiu de 269 empresas entre as familiares e não familiares. A revisão de literatura gerou 6 hipóteses que observaram as dimensões de propriedade, endividamento e custo de capital. Os dados foram tratados e analisados com auxílio do software SPSS, mediante estatística descritiva, correlação e regressão linear. Os resultados demonstram que o Endividamento a Longo Prazo e o Endividamento Total apresentaram coeficientes negativos, o que denota uma relação inversamente proporcional entre eles e a gestão familiar. Na regressão, os resutados apontam que as dimensões de propriedade na gestão familiar e a concentração acionária influenciam significativamente no endividamento das empresas. Denota-se uma tendência de que essa influência em empresas familiares torna-se mais significativa quando avaliada em aspectos de longo prazo. Mesmo com essa característica, empresas familiares tendem a apresentar-se menos endividadas se comparadas às demais. O controle acionário nelas não se mostrou significante nas análises propostas. E a relação entre gestão familiar, concentração acionária e controle acionário com o custo de capital não demonstrou significância, divergindo de outros estudos que evidenciaram significativas influências nessas relações. Ao final são apresentadas limitações e sugestões para novas investigações.

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Capital Structure Adjustment in Brazilian Family Firms

Cited by 17 publications

References 53 publications

Leverage and investment opportunities: the effect on high growth firms

Leverage and investment opportunities: the effect on high growth firms

Public family firms and capital structure: A meta‐analysis

Influência da propriedade familiar na estrutura e custo de capital das empresas brasileiras

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