TITLE:
Transparency and Financing Choices of Family Firms
AUTHORS:
Muhammad Ishfaq Ahmad, Muhammad Abubakr Naeem, Mudassar Hasan, Muhammad Akram Naseem, Ramiz Ur Rehman
KEYWORDS:
Family Firms, Non-Family Firms, Maturity, Leverage
JOURNAL NAME:
Theoretical Economics Letters,
Vol.8 No.3,
February
28,
2018
ABSTRACT: Past literature indicates
that family firms were different from nonfamily firms in term of performance,
governess and disclosure. But there was very little evidence which specified
the financial structure of family firm. Maturity and leverage, two proxies are
used to examine the financial structure of family firm in this particular
study. This study shows that family firms are different from non-family firms
in terms of debt maturity and leverage. Moreover, transparency is negatively
related to maturity which indicates that more transparency decreases maturity,
while family firms have more debt maturity which suggested that family firms
are more relying on long-term debt and there is a chance of expropriation in
family firms due to less transparency. Furthermore, transparency is positively
related with leverage which indicates that more transparency increases leverage,
while family firms also have positive relationship with leverage which specifies
that more transparency leads family firms’ financial structure more toward
debt.