The authors would like to thank the Research Foundation – Flanders (FWO) – in Belgium for the financial grant that enabled us to perform this study. We also thank conference participants at the Research in Entrepreneurship and Small Business Conference 2009 (Budapest, Hungary) and at the Annual Conference of the Academy of Innovation and Entrepreneurship 2009 (Beijing, China) for helpful suggestions.
The determinants of cash holdings in private family firms
Version of Record online: 24 JAN 2012
© 2012 The Authors. Accounting and Finance © 2012 AFAANZ
Accounting & Finance
Volume 53, Issue 2, pages 537–560, June 2013
How to Cite
Steijvers, T. and Niskanen, M. (2013), The determinants of cash holdings in private family firms. Accounting & Finance, 53: 537–560. doi: 10.1111/j.1467-629X.2012.00467.x
- Issue online: 3 MAY 2013
- Version of Record online: 24 JAN 2012
- Received 23 December 2010; accepted 24 October 2011 by Robert Faff (Editor).
- Family firms;
- Agency theory;
- Outside CEO;
- Descendant CEO
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.