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Are financing decisions of family-owned SMEs different? Empirical evidence using panel data

Published online by Cambridge University Press:  02 February 2015

Zélia Serrasqueiro ,
Paulo Maçãs Nunes  and
Jacinto Vidigal da Silva
Zélia Serrasqueiro
Affiliation:
Department of Management and Economics, Beira Interior University, Covilhã, Portugal Centre for Advanced Studies in Management and Economics of the Universidade de Évora (CEFAGE-UE), Covilhã, Portugal
Paulo Maçãs Nunes
Affiliation:
Department of Management and Economics, Beira Interior University, Covilhã, Portugal Centre for Advanced Studies in Management and Economics of the Universidade de Évora (CEFAGE-UE), Covilhã, Portugal
Jacinto Vidigal da Silva
Affiliation:
Centre for Advanced Studies in Management and Economics of the Universidade de Évora (CEFAGE-UE), Covilhã, Portugal Department of Management, Évora University, Évora, Portugal
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Abstract

This paper analyses if ownership structure is an important determinant of capital structure decisions, on the basis of two sub-samples of family-owned and non-family owned SMEs, and using panel data models. The results suggest that family ownership is an important determinant for: i) the variations of short and long-term debt stimulated by financial deficit; ii) the speed of adjustment of short and long-term debt towards the respective target levels; and iii) the relationships between determinants and short-term debt and long-term debt. In general, the capital structure decisions of family-owned SMEs are closer to what is forecast by trade-off theory than those of non-family owned SMEs, whereas the capital structure decisions of non-family owned SMEs are closer to the forecasts of pecking order theory than those of family-owned SMEs.

Keywords

family-owned SMEslong-term debtnon-family owned SMEspanel data modelsshort-term debt
Type
Research Article
Information
Journal of Management & Organization , Volume 18 , Issue 3 , May 2012 , pp. 363 - 382
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2012

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