Do dissimilarities in the family involvement in family firms lead to different levels of indebtedness? Evidence from Spain
ISSN: 0025-1747
Article publication date: 2 March 2021
Issue publication date: 2 November 2021
Abstract
Purpose
This paper examines how differences in the family involvement in a family business can influence its level of indebtedness. Assuming the influence of family is not the same for all family firms, we consider each company as a combination of the family involvement in three dimensions of the business: ownership, management and governance structure.
Design/methodology/approach
Using the partial least squares technique allows us to address the heterogeneity of family firms through an integral concept of family involvement in business that jointly considers the level of family participation in the ownership, management and governance structure of each firm.
Findings
Our results demonstrate that the level of family involvement in a family firm, considering the heterogeneity existing within the family business group, directly influences its level of indebtedness. In addition, we find that family involvement in ownership and governance structures individually considered are positively related to the level of indebtedness of the family business.
Originality/value
Our findings prove that some indebtedness patterns, which previous literature has described as common to all Spanish family businesses, may actually be valid only for specific family firms with a particular level of family involvement. In addition, the way of measuring family business heterogeneity through our integral concept of family involvement can be replicated by other authors because of the manageability of the items, thus contributing to an increased understanding of the effects of family involvement in firms' development.
Keywords
Acknowledgements
The authors are grateful to the participants of the XVIII International Conference ASEPUC (2018) and the V International Meeting of Specialization for Research in Economics and Business (2018). Special thanks are due to the four anonymous referees and the editors for their guidance and very constructive comments.
Citation
Comino-Jurado, M., Sánchez-Andújar, S. and Parrado-Martínez, P. (2021), "Do dissimilarities in the family involvement in family firms lead to different levels of indebtedness? Evidence from Spain", Management Decision, Vol. 59 No. 12, pp. 2891-2906. https://doi.org/10.1108/MD-05-2020-0582
Publisher
:Emerald Publishing Limited
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