Capital structure in family firms: the role of innovation activity and institutional investors

Harasheh, Murad; Capocchi, Alessandro; Amaduzzi, Andrea

doi:10.1108/emjb-12-2021-0191

Cited by 6 publications

(4 citation statements)

References 131 publications

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“…The study provided insights into the financial characteristics and risk profiles of family businesses, highlighting the potential influence of family ownership on capital structure choices and risk management strategies. Harasheh et al (2022) contributed to the ongoing debate on the value relevance of capital structure and its determinants by exploring 700 privately held family firms in Italy from 2010 to 2019, focusing on family firms. The authors examined the role of a family firm's innovation activity on leverage by testing whether more innovative family firms attract more debt.…”

Section: Impact On the Capital Structurementioning

confidence: 99%

The Impact of Family Ownership on Capital Structure and Business Performance

Stryckova

2023

IJFS

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Financial decision making in family companies is a topical issue that has arisen from an awareness of the significant impact of family businesses on the economies of individual countries. This article deals with the capital structure and business performance of family firms in the Czech Republic, as there is still a significant gap in family business research and empirical verification. This study aims to investigate Czech family businesses’ corporate financing practices and compare them with population data from all active companies. The literature distinguishes between the positive and negative impacts of family ownership on capital structure and performance. Our empirical findings hypothesise that family businesses are more leveraged than non-family firms and vice versa. At the same time, a slightly positive impact from family influence on firm financial performance is indicated. This study uses descriptive statistics to detect family influence on corporate capital structure and financial performance regarding business sectors. The results of this study indicate that Czech family firms are less indebted than all/non-family businesses, and that they have proved to be more profitable in terms of ROEs and ROAs. Furthermore, significant differences in financial characteristics have been identified not just between individual business sectors but also between sample family firms and all/non-family firms within one business sector.

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Section: Impact On the Capital Structurementioning

confidence: 99%

The Impact of Family Ownership on Capital Structure and Business Performance

Stryckova

2023

IJFS

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“…Several papers have studied the link between debt and innovation (Amore et al ., 2013; Chava et al ., 2013; Mann, 2018). While most papers studied the impact of debt on innovation, Harasheh et al . (2022) studied the impact of innovation activity on debt.…”

Section: Introductionmentioning

confidence: 99%

“…Several papers have studied the link between debt and innovation (Amore et al, 2013;Chava et al, 2013;Mann, 2018). While most papers studied the impact of debt on innovation, Harasheh et al (2022) studied the impact of innovation activity on debt. This paper is different from other papers in that this paper studies how having debt above or below its target affects innovation.…”

Section: Introductionmentioning

confidence: 99%

Leverage target and firm innovation

Khan

2023

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PurposeIn this paper, the author examines how capital structure (relative to target) affects firm innovation.Design/methodology/approachThe author uses cross-sectional OLS regressions (for each year of data) to determine whether a firm is above or below its target debt level (in that year) and then uses fixed effects OLS regressions with panel data to examine the impact of having leverage above or below the firm's target on its innovation activity.FindingsThe author shows that firms with below-target debt innovate more in terms of number of patents granted and have better quality innovations in terms of citation counts of patents and in terms of economic value of patents. The results hold for sample splits based on firm age, firm size and access to external finance. The author also shows that the findings are not driven by the negative correlation between leverage and innovation measures. Overall, the results indicate that it is not the actual level of leverage that impacts innovation; the relevant factor that impacts firm innovation is whether a firm is above or below its leverage target.Originality/valueThe author extends the literature on financing innovation by linking leverage target with firm innovation. Findings of this paper also provide supporting evidence that capital structure plays an important role on firm innovation and supplements prior literature that shows the importance of debt in financing firm innovation.

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“…Besides, new ventures are crucial to the society because it reduces the social problems including crime rate, income inequalities and poverty [2]. On the similar line, various studies [3,4]. have explored the consequences of new ventures on economic, society, ground-breaking innovations, and wealth creation.…”

Section: Introductionmentioning

confidence: 99%

Drivers of New Venture Digitalization Among Malaysian Smes: A Conceptual Model

Chin,

Amy,

Tan

et al. 2023

ijaeb

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This study is an extension of previous studies focusing on new venture digitalization. It examines the influence of the drivers of new venture digitalization on small and medium enterprises (SMEs). Using a systematic literature review, the study developed a conceptual model to examine the drivers of new venture digitalization among Malaysian SMEs. The findings reveal the extent to which organizational factors such as size, ownership and international experience of firms can influence Malaysian SMEs’ new venture digitalization. It also indicates that individual and environment factors such as age, gender, and education; government intervention, competitors and customers pressure, Covid-19 health crisis, blockchain technology and fast broadband access have the potential to drive Malaysian SMEs’ new venture digitalization. The study contributes to models on new venture digitalization and provides a better understanding of general and country specific factors that drives the utilization of digitalization in new ventures.

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Capital structure in family firms: the role of innovation activity and institutional investors

Cited by 6 publications

References 131 publications

The Impact of Family Ownership on Capital Structure and Business Performance

The Impact of Family Ownership on Capital Structure and Business Performance

Leverage target and firm innovation

Drivers of New Venture Digitalization Among Malaysian Smes: A Conceptual Model

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