Impact of Family Control and Influence on Financing Decisions of Family Firms: A Case of Pakistani Family Firms in the Prospective of Socioemotional Wealth

Authors

  • Shoaib Masood Khan Bahauddin Zakariya University, Multan, Pakistan.
  • Shahzad Akhtar Bahauddin Zakariya University, Multan, Pakistan. https://orcid.org/0000-0003-4081-1169

DOI:

https://doi.org/10.52131/pjhss.2023.1101.0358

Keywords:

Financing Decisions, Socioemotional Wealth, Family Firms

Abstract

This study focuses on the financing choices of family firms under the umbrella of Socioemotional wealth. It investigates how a family firm makes its financing policy based on persuasion of a non-financial goal which is the need to maintain family control over the business. In the context of non-financial Pakistani listed firms in the Pakistan Stock Exchange, with data range starts from 2009 to 2020. Our results show that family firms with a high need to maintain their family control over the business have high debt levels. Similarly having family representation on the board shows a positive relationship with debt financing. We also conclude that having a family CEO is also linked with the use of extensive debt. Our findings are consistent with the view that Socioemotional wealth is an important determinant of making important financial decisions.

 

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Author Biographies

Shoaib Masood Khan, Bahauddin Zakariya University, Multan, Pakistan.

Ph.D. Scholar, Institute of Management Sciences

Shahzad Akhtar, Bahauddin Zakariya University, Multan, Pakistan.

Assistant Professor, Institute of Management Sciences

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Published

2023-03-27

How to Cite

Khan, S. M. ., & Akhtar, S. (2023). Impact of Family Control and Influence on Financing Decisions of Family Firms: A Case of Pakistani Family Firms in the Prospective of Socioemotional Wealth. Pakistan Journal of Humanities and Social Sciences, 11(1), 382–392. https://doi.org/10.52131/pjhss.2023.1101.0358

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Articles