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Corporate Financing and Investment Decisions in Family Firms – A Comparison of Founding and Non-Founding Family Firms
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
2015 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Family ownership is widespread and family owners are often characterized by risk-aversion and a long-term focus. We separate between founding family firms and non-founding family firms with long-term interests to investigate their impact on the financing and investment decisions. From our regression models, we can conclude that founding families carry less leverage but invest more in R&D. While the leverage results are consistent when put through a battery of robustness tests, the R&D results are more volatile. Risk-aversion and socioemotional attachment are used to explain the lower levels of leverage, but these fail to explain the higher levels of R&D. The higher levels are believed to stem from the entrepreneurial trait inherent in founding family firms. Moreover, other factors are also proven to be of importance for these family firms in terms of their financing and investments decisions, e.g. industry effects. Having to conform to such factors, the discretion for owner preferences is believed to decrease. This study contributes to the existing body of literature by demonstrating the heterogeneity of family firms and the importance of differing owner interests.

Place, publisher, year, edition, pages
2015. , 60 p.
Keyword [en]
corporate financing, investment decisions, family firms, long-term family owners
National Category
Business Administration
Identifiers
URN: urn:nbn:se:uu:diva-256333OAI: oai:DiVA.org:uu-256333DiVA: diva2:825033
Subject / course
Business Studies
Educational program
Master Programme in Business and Management
Supervisors
Available from: 2015-06-23 Created: 2015-06-22 Last updated: 2015-06-23Bibliographically approved

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CiteExportLink to record
Permanent link

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Citation style
  • apa
  • ieee
  • modern-language-association
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
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Output format
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