Abstract

Extent research found that financing decisions in family firms and the resulting capital structure differ substantially from those of their nonfamily counterparts (e.g. Croci et al. 2011; Romano et al. 2000; Schmid 2013; Koropp et al. 2014). Surprisingly, there is less agreement about the direction of the effect. While several studies reported that (some types of) family firms use more debt (e.g. Romano et al. 2000; Croci et al. 2011; Gottardo and Moisello 2014), others found the opposite effect (e.g. McConaughy et al. 2001; Schmid 2013; Ampenberger et al. 2013) or no systematic effect (e.g. Anderson and Reeb 2003). Several theoretical explanations for differences in debt ratios have been proposed of which the specific control motivations of family owners rank ahead.