Project R-11167

Sources of Financing for Family Businesses (Research)

Family firms are considered to be the backbone of the economy. Their access to different sources of finance, as well as their willingness to attract financing sources in order to execute valuable investment projects, is crucial for each economy. Even though prior studies indicate that financing decisions in family firms differ substantially from non-family firms, current research is not able to identify why financing decisions differ in family firms, and whether the actual use of financing sources in family firms is demand-driven (are they willing to use the source) or supply-driven (are they able to obtain the source?). Therefore, the first objective of this project is to determine the order in which different sources of financing are attracted. Next, this project will investigate the effect of the family firms' non-economic goals and governance structures on the willingness to obtain bank debt. Finally, this project will explore the use of trade credit in family firms.

16 September 2021 - 15 December 2021