How do Managerial Successions Shape Corporate Financial Policies in Family Firms?

Mario Daniele Amore, Alessandro Minichilli, Guido Corbetta

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

Resumé

Despite recent evidence on the importance of chief executive officer (CEO) successions in family firms, we still know little about the differences in corporate strategies entailed by family and professional managers around transition. We investigate the consequences of managerial successions for the financial policies of Italian family firms. Our findings indicate that the appointment of non-family professional CEOs leads to a significant increase in the use of debt, primarily driven by short-term maturities. We document substantial heterogeneity in the impact of professional successions on debt financing: the increase in debt is particularly pronounced for young firms, firms with a high level of investment, and firms in which the controlling family maintains a dominant representation on the board of directors. Examining the importance of financial flexibility, we find that the increase in debt occurs primarily when firms are cash-poor, and when incoming CEOs can exploit spare borrowing capacity.
OriginalsprogEngelsk
TidsskriftJournal of Corporate Finance
Vol/bind17
Udgave nummer4
Sider (fra-til)1016-1027
ISSN0929-1199
DOI
StatusUdgivet - 2011

Citer dette

Amore, Mario Daniele ; Minichilli, Alessandro ; Corbetta, Guido. / How do Managerial Successions Shape Corporate Financial Policies in Family Firms?. I: Journal of Corporate Finance. 2011 ; Bind 17, Nr. 4. s. 1016-1027.
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How do Managerial Successions Shape Corporate Financial Policies in Family Firms? / Amore, Mario Daniele; Minichilli, Alessandro; Corbetta, Guido.

I: Journal of Corporate Finance, Bind 17, Nr. 4, 2011, s. 1016-1027.

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

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AU - Minichilli, Alessandro

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