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When do family firms consider issuing external equity? Understanding the contingent role of families’ need for control
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Kupp, Martin, Schmitz, Bianca and Habel, Johannes (2019) When do family firms consider issuing external equity? Understanding the contingent role of families’ need for control. Journal of Family Business Management, 9 (3). pp. 271-296. doi:10.1108/JFBM-08-2018-0021 ISSN 2043-6238.
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Official URL: https://doi.org/10.1108/JFBM-08-2018-0021
Abstract
Prior research has argued that family firms are reluctant to consider external equity as a source of financing because they fear a loss of control, which would limit their socioemotional wealth. However, prior empirical research has neglected potential contingencies that determine whether family firms’ need for control affects their equity financing decisions. The present paper provides first insight into this research void. Building on rational choice theory and a logit regression using secondary data, the authors show that the effect of family firm owners’ need for control on their consideration of external equity depends on (a) the extent to which owners expect investors to interfere with management and (b) the extent to which decision making is affected by emotions. Hereby, the present study provides evidence that family firm owners’ decisions to use external equity are more complex than previously presumed.
| Item Type: | Journal Article | ||||||
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| Subjects: | H Social Sciences > HD Industries. Land use. Labor | ||||||
| Divisions: | Faculty of Social Sciences > Warwick Business School > Marketing Group Faculty of Social Sciences > Warwick Business School |
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| Library of Congress Subject Headings (LCSH): | Family-owned business enterprises, Equity | ||||||
| Journal or Publication Title: | Journal of Family Business Management | ||||||
| Publisher: | Emerald | ||||||
| ISSN: | 2043-6238 | ||||||
| Official Date: | 2019 | ||||||
| Dates: |
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| Volume: | 9 | ||||||
| Number: | 3 | ||||||
| Page Range: | pp. 271-296 | ||||||
| DOI: | 10.1108/JFBM-08-2018-0021 | ||||||
| Status: | Peer Reviewed | ||||||
| Publication Status: | Published | ||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||
| Copyright Holders: | Copyright © 2019, Emerald Publishing Limited | ||||||
| Date of first compliant deposit: | 20 March 2019 | ||||||
| Date of first compliant Open Access: | 4 April 2019 | ||||||
| Related URLs: |
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