Abstract

Family firms are one of the most ubiquitous forms of business organizations worldwide. Their survival and growth are thus not only crucial for the firms themselves but also for the overall economy. One of the factors that influence their survival and development are their financing decisions. These decisions are generally described through the pecking order theory. However, not much is known about the applicability of this theory in private family firms. Given the shortcomings (both theoretically and empirically) of the current literature, we analyze 1087 incremental financing decisions from 277 family firms to develop and test a specific family firm pecking order. We integrate the elements of the socioemotional wealth perspective to theoretically explain the preferred order and introduce family capital into the pecking order model. Our findings indicate that family firms first prefer internal financing, next debt financing, followed by family capital, and last external capital. We also find that SEW considerations play a role in this financing decision. Especially the retention of control over the firm and the aim to pass the firm to the next generation appear to play an important role in determining this order. These dimensions ensure that family firms try to avoid extra capital. However, when it is needed, they will opt for family capital over external capital. This paper thus provides more insight into the reasoning behind financing decisions in private family firms.

Plain English Summary

How do family firms finance their investments? When looking for ways to finance their investments, firms have several options. According to traditional finance theories, they generally follow a so-called pecking order: they prefer to first use their internal funds, before turning to external financing. For family firms, the most ubiquitous form of business organization worldwide, two important aspects have been ignored in this research until now. First, socioemotional aspects influence decision-making in family firms and thus probably also financing decisions. Next, the business family itself can act as an external source of finance, which is not yet accounted for in the current pecking order model. In this research, we take these issues into account in order to develop—theoretically and empirically—a family firm pecking order. We investigate over a thousand financing decisions of 277 privately held family firms. Our results show that they prefer internal financing, followed by bank debt, family capital, and external capital. Especially the retention of control over the firm and the aim to pass the firm to the next generation appear to play an important role in determining this order. Our research thus indicates that future research should pay attention to the peculiarities of family firms when investigating their financing decision.

中文翻译：

---

私人家族企业的融资决策：家族企业的融资顺序

 抽象的

家族企业是全球最普遍的商业组织形式之一。因此，它们的生存和发展不仅对企业本身至关重要，而且对整体经济也至关重要。影响其生存和发展的因素之一是其融资决策。这些决策通常通过啄食顺序理论来描述。然而，人们对这一理论在私人家族企业中的适用性知之甚少。鉴于当前文献的缺陷（理论和实证上），我们分析了 277 家家族企业的 1087 项增量融资决策，以制定和测试特定的家族企业融资顺序。我们整合社会情感财富视角的要素，从理论上解释偏好顺序，并将家庭资本引入啄食顺序模型。我们的研究结果表明，家族企业首先偏好内部融资，其次是债务融资，其次是家族资本，最后是外部资本。我们还发现 SEW 考虑因素在这一融资决策中发挥了作用。特别是保留对公司的控制权以及将公司传给下一代的目标似乎在​​决定这一顺序方面发挥着重要作用。这些维度确保家族企业尽力避免额外资本。然而，当需要时，他们会选择家族资本而不是外部资本。因此，本文提供了对私人家族企业融资决策背后的推理的更多见解。

 简单的英语摘要

家族企业如何为其投资融资？在寻找投资融资方式时，公司有多种选择。根据传统的金融理论，它们通常遵循所谓的融资顺序：它们更愿意首先使用内部资金，然后再转向外部融资。对于家族企业（全球最普遍的商业组织形式）来说，迄今为止，本研究忽略了两个重要方面。首先，社会情感方面影响家族企业的决策，因此也可能影响融资决策。其次，企业家族本身可以充当外部资金来源，而当前的融资顺序模型尚未考虑到这一点。在这项研究中，我们考虑了这些问题，以便从理论上和实证上发展家族企业的啄食顺序。我们调查了 277 家私营家族企业的一千多项融资决策。我们的研究结果表明，他们更喜欢内部融资，其次是银行债务、家庭资本和外部资本。特别是保留对公司的控制权以及将公司传给下一代的目标似乎在​​决定这一顺序方面发挥着重要作用。因此，我们的研究表明，未来的研究在调查家族企业的融资决策时应关注家族企业的特殊性。