Family Control and the Sensitivity of Investment to Cash Flow: Evidence from a MultiEquation Modelling Approach

Johannes Beyenbach, Daniel Powell, Marc Steffen Rapp

Publikation: KonferencebidragPaperForskningpeer review

Abstrakt

We empirically examine the influence of family control on the sensitivity of a firm’s investment to cash flow. Implementing a dynamic multi-equation investment model, we find – in line with intuition but contrary to previous research – higher sensitivities for family-controlled firms. This pattern becomes stronger once we take into account financial constraints or use the 2008-2010 financial crisis as an exogenous liquidity shock. In addition, we find investments of family firms to be less sensitive to investment opportunities. Overall, our results are consistent with the view that family prefer to finance their investments by internal funds and adjust their investments accordingly.
OriginalsprogEngelsk
Publikationsdato2018
Antal sider43
StatusUdgivet - 2018
BegivenhedEuropean Financial Management Association 2018 Annual Meetings - Università Cattolica del Sacro Cuore, Milan, Italien
Varighed: 27 jun. 201830 jun. 2018
Konferencens nummer: 27
https://www.efmaefm.org/0EFMAMEETINGS/EFMA%20ANNUAL%20MEETINGS/2018-Milan/2018%20meetings.php

Konference

KonferenceEuropean Financial Management Association 2018 Annual Meetings
Nummer27
LokationUniversità Cattolica del Sacro Cuore
LandItalien
ByMilan
Periode27/06/201830/06/2018
Internetadresse

Emneord

  • Family control
  • Investment-cash flow sensitivity
  • Family firm
  • Financial flexibility
  • Germany

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