Financial Attitudes in Family Firms: The Moderating Role of Family Commitment

Abstract

This study investigates how family commitment moderates whether and how financial knowledge, positive experience with debt suppliers, and economic goal orientation affect owner–managers' attitudes toward debt financing in family firms. Using a sample of 280 German family firms, we find significant relationships between both financial knowledge and positive experience with debt suppliers and owner–managers' financial attitudes toward debt. Our findings show that family commitment moderates these relationships such that high family commitment increases the impact of prior experience with debt suppliers, though the effect of economic goal orientation is lowered and reversed. Overall, we contribute to research on financial decision making, capital structure, and social capital in family firms.

Capital Structure Determinants in Family Firms: An Empirical Analysis in Context of Crisis

“…Specifically, existing empirical research on family firms' capital structure has highlighted that: a) both economic and non-economic reasons influence their financial decisions (Gallo et al, 2004;Koropp et al 2013); b) they are strongly dependent on self-financing and adopt conservative financial strategies (Romano et al, 2000); and c) they often forgo growth opportunities due to their reluctance in issuing new external resources to safeguard family control on the business (Croci et al, 2011;Gonzalez et al, 2013;Mahé rault, 2004;Romano et al, 2000;Wu et al, 2007). However, these empirical studies on family firms have given mixed results about the main determinants of their capital structure (Coleman & Carsky, 1999;Romano et al, 2000;Lopez-Garcia et al, 2007).…”

“…Financial behavior of family firms -the most ubiquitous form of business organization in any world economy (La Porta et al, 1999) -has become a topic of growing interest because many research have highlighted that family firms' financial decision-making is unique and very different from non-family firms Koropp et al, 2013;Crespi & Martin-Oliver, 2015;Steijvers & Voordeckers, 2009;Wu et al, 2007). Family firms are strongly dependent on self-financing, and they often forgo growth opportunities due to their reluctance to issue external funds in order to safeguard family control (Croci et al, 2011;Gonzalez et al, 2013;Mahé rault, 2004;Romano et al, 2000;Wu et al, 2007) and protect their socioemotional wealth (GomezMejìa et al, 2007).…”

Sikap Keuangan Pada Perusahaan Keluarga: Peran Moderasi Komitmen Keluarga

“…Dibandingkan dengan perusahaan publik non keluarga, pengambilan keputusan keuangan di perusahaan keluarga sangat berbeda, karena adanya pertimbangan non keuangan, misalnya, kebutuhan untuk kontrol keluarga (Blanco-Mazagatos, et al, 2007;Koropp, et al, 2013).…”

“…Meskipun penelitian sebelumnya telah melakukan studi tentang pembiayaan perusahaan keluarga, namun hasil hasil penelitian sebelumnya tidak mempertimbangkan karakteristik unik dari perusahaan keluarga (Koropp et al, 2013). Oleh karena itu penelitian tentang sikap manajer-pemilik menjadi sangat penting untuk diperdalamkan.…”

“…Sama seperti penelitian yang dilakukan oleh Koropp, et al, (2013), penelitian ini menggunakan perspektif manajemen strategis atas pilihan struktur modal untuk mengeksplorasi bagaimana karakteristik pribadi (pengetahuan keuangan, pengalaman positif dengan pemasok utang, dan orientasi tujuan ekonomi perusahaan) mempengaruhi sikap pemilik-manajer perusahaan keluarga. Secara khusus, studi ini meneliti sikap finansial pemilik-manajer terhadap pembiayaan utang karena utang biasanya merupakan sumber keuangan eksternal utama yang dipertimbangkan dalam perusahaan keluarga (Romano, et al, 2001).…”