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
This 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.
|Date of creation:||2010|
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