Does family control of small business lead to under exploitation of their financial growth potential? Evidence of the existence of conservative growth behavior in family controlled French SMEs
AbstractThis paper uses a very large sample of French SMEs to study growth of small businesses. Firms are distinguished according to the intensity of family control. The estimated relationship accounts for firm characteristics of size, age, sector, and ease to access credit. The results show that firms with greater family control are prone to exhibit lower rates of sales growth than feasible, given firm internal financing resources (ie they adopt a conservative growth behavior). Because firm growth is limited not by financing constraints but by family-related incentives to restrict firm size, increasing firm growth requires policies that shape incentives orientated toward growth in small family businesses.
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Bibliographic InfoPaper provided by Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg in its series Working Papers of LaRGE Research Center with number 2010-01.
Date of creation: 2010
Date of revision:
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Small Business; Family control; Growth; Sustainable growth; Tax evasion.;
Find related papers by JEL classification:
- G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-30 (All new papers)
- NEP-BEC-2010-01-30 (Business Economics)
- NEP-ENT-2010-01-30 (Entrepreneurship)
- NEP-SBM-2010-01-30 (Small Business Management)
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