Do family firms pay less for external funding?

Ali, M., Miglani, S., Dang, M., Puwanenthiren, P. and Mieszko, M. 2022. Do family firms pay less for external funding? Australian Journal of Management. 47 (2), pp. 225-250. https://doi.org/10.1177/03128962211018241

TitleDo family firms pay less for external funding?
TypeJournal article
AuthorsAli, M., Miglani, S., Dang, M., Puwanenthiren, P. and Mieszko, M.
Abstract

We examine the impact of family’s presence on the cost of raising external funds by family-run enterprises. Using a sample of Australian publicly listed firms, we find a significantly negative relation between cost of newly raised capital and family presence. Moreover, we show that this relationship varies with the quality of corporate governance and the quality of firm’s information environment. Further, we conduct several robustness checks and consistently find that our main results remain unchanged. Overall, our evidence suggests that family firms have easier access to external financing fostered by family involvement in the ownership and control.

KeywordsAustralian family firms, corporate governance, cost of capital, financial analysts, institutional ownership
JournalAustralian Journal of Management
Journal citation47 (2), pp. 225-250
ISSN0312-8962
1327-2020
Year2022
PublisherSage
Accepted author manuscript
Digital Object Identifier (DOI)https://doi.org/10.1177/03128962211018241
Web address (URL)https://journals.sagepub.com/doi/10.1177/03128962211018241
Publication dates
Published19 Jul 2021
Published in print2022

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