The determinants of cash holdings in private family firms |
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Authors: | Tensie Steijvers Mervi Niskanen |
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Affiliation: | 1. KIZOK Research Center, Hasselt University, Diepenbeek, Belgium;2. School of Business, University of Eastern Finland, Finland |
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Abstract: | We present empirical evidence on traditional and family firm–specific determinants of cash holdings in the under‐researched context of private family firms. We examine, from an agency theoretic perspective, how and to what extent the relation between family firm management and cash holdings is moderated by the ownership structure. Results reveal that descendant CEOs appear to maintain higher cash holdings than founder CEOs. This effect seems to be stronger if there is a low ownership dispersion. Moreover, outside CEOs maintain higher cash holdings than family CEOs if the family firm is owned by a single owner. |
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Keywords: | Cash Family firms Agency theory Outside CEO Descendant CEO D22 G32 M40 |
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