Founding Family, Pyramid Structure and Debt Cost

DOI

10.2991/icetms.2013.281How to use a DOI?

Keywords

Founding family control; Pyramid structure; Debt cost

Abstract

With undeveloped financial market, private firms are facing severe financing constraints. Debt financing from banks is main financing channel for most private firms. Based on the three characteristics of the founding family firms: undiversified investments, long-term investment horizon, and reputation concerns, this paper investigates the impact of founding family on debt cost. We find that, compared to non-family firms, founding family firms enjoy lower debt cost and their debt cost shows lower sensitivity to the pyramid structures. Our results show that founding family is an important variable that affects the firms’ debt cost significantly.

Copyright

© 2013, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Yizheng Qiu
AU  - Yueping Pan
PY  - 2013/06
DA  - 2013/06
TI  - Founding Family, Pyramid Structure and Debt Cost
BT  - Proceedings of the 2013 Conference on Education Technology and Management Science (ICETMS 2013)
PB  - Atlantis Press
SP  - 1036
EP  - 1039
SN  - 1951-6851
UR  - https://doi.org/10.2991/icetms.2013.281
DO  - 10.2991/icetms.2013.281
ID  - Qiu2013/06
ER  -