Capital structure in family firms: the role of innovation activity and institutional investors

作者：Murad Harasheh, Alessandro Capocchi, Andrea Amaduzzi · 发表于：EuroMed Journal of Business · 年份：2022 · DOI：10.1108/emjb-12-2021-0191 · 被引用次数：18 · 研究领域：Family Business Performance and Succession、Corporate Finance and Governance、Working Capital and Financial Performance

Purpose There is still an ongoing debate on the value relevance of capital structure and its determinants. Recently the issue has been explored in family firms after being explored in mature firms. This paper investigates the role of institutional investors and the firm's innovation activity in influencing the firm's decision and ability to acquire debt capital. Design/methodology/approach A large sample of 700 privately-held family firms in Italy from 2010 to 2019. Two analysis techniques are used: panel analysis and path analysis. The value of debt and the debt ratio are used as leverage measures. The value of patent (as a proxy for innovation) and institutional investor are the explanatory variables. Findings The results show that institutional investors have no relationship with financial leverage measures except when controlling for an interaction variable (Institutional investors × Lombardy region). The patent value is positively correlated with debt; however, the ratio patent-to-asset is negatively related to financial leverage indicating higher risk exposure. The nonlinearity test demonstrates a turning point when the relationship between patent value and debt inverts. Practical implications Firms should monitor their innovation activity since excessive innovation increases risk exposure and affects financing opportunities and value. The involvement of institutional investors does not always enhance value. Originality/value Existing literature focuses separately on fa...