Family Control,International Accounting Standards,and Access to Foreign Banks: Evidence from International Entrepreneurial Firms

This article aims to understand if a change in accounting standards offers new avenues for helping entrepreneurial firms, especially those family‐controlled ones, to obtain debt financing from foreign banks. We find that amid the global wave of adopting International Accounting Standards (IAS), family‐controlled firms tend not to voluntarily switch from local generally accepted accounting principles to IAS. After self‐selection issues are taken into account, furthermore, entrepreneurial firms adopting IAS experience less difficulty accessing loans from international banks. However, IAS adoption differentially influences private firms, family owned versus nonfamily controlled, in terms of their access to debt capital.