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Does family ownership structure affect investment-cash flow sensitivity? Evidence from Italian SMEs

Listed author(s):
  • Valentina Peruzzi

    ()

    (Università Politecnica delle Marche)

The aim of this paper is to investigate whether family control, family management and family ownership concentration affect the investment-cash flow sensitivity of small- and medium-sized enterprises. By analysing a sample of Italian SMEs for the period 2004-2013, I find that family-owned businesses are significantly associated with higher investment-cash flow dependence. This relation, however, is found to be driven by two distinct factors: (i) the presence of a highly concentrated family ownership (ownership concentration channel) and (ii) the active involvement of the family in the business (family management channel).

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Paper provided by CERBE Center for Relationship Banking and Economics in its series CERBE Working Papers with number wpC16.

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Length: 38 pages
Date of creation: Jan 2017
Handle: RePEc:lsa:wpaper:wpc16
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