Family Control and Financing Decisions

Empirical studies examining the financing decisions of the firm focus exclusively on publicly held firms, not family-controlled firms despite their economic importance. This study investigates the external financing behavior of family-controlled firms, using a comprehensive sample of 777 large European firms during the period 1998 to 2008. We document that, unlike nonfamily-controlled firms, the external financing decisions of family-controlled firms are influenced by control incentives and information asymmetry considerations. We find that family firms have a strong preference for debt financing, a noncontrol diluting security, while they are more reluctant to raise capital through equity offerings in comparison to nonfamily firms. We also find that credit markets, view family firms as more risk-averse and that family firms invest more in low-risk (fixed-asset capital expenditures (CAPEX)), than in high-risk investments (R&D expenditures) confirming their non-risk seeking behavior.Family firms, financing decisions, equity issues, debt issues, capital structure.

WHICH ARE THE FACTORS INFLUENCING FINANCING DECISIONS IN SMEs?

In this paper I review the literature in search of the factors that influence financing decisions in SMEs. Financial theories suggest that the only goal of a company is value maximization, but empirical studies have shown that small companies’ owners can have other goals than profit maximization, this being reflected in their financing decisions. Also the personal characteristics of SMEs’ founders are relevant in establishing the companies financing strategydecisions, financing, medium sized firms, profit maximization, small sized firms.

Hedging, financing, and investment decisions: a simultaneous equations framework

The purpose of this paper is to empirically investigate the interaction between hedging, financing, and investment decisions. This work is relevant in that theoretical predictions are not necessarily identical to those in the case where only two decisions are being made. We argue that the way in which hedging affects the firms’ financing and investing decisions differs for firms with different growth opportunities. We empirically find that high-growth firms increase their investment, but not their leverage, by hedging. However, we also find that firms with few investment opportunities use derivatives to increase their leverage.

Behavioral Corporate Finance: A Survey

Research in behavioral corporate finance takes two distinct approaches. The first emphasizes that investors are less than fully rational. It views managerial financing and investment decisions as rational responses to securities market mispricing. The second approach emphasizes that managers are less than fully rational. It studies the effect of nonstandard preferences and judgmental biases on managerial decisions. This survey reviews the theory, empirical challenges, and current evidence pertaining to each approach. Overall, the behavioral approaches help to explain a number of important financing and investment patterns. The survey closes with a list of open questions.

Corporate financing decisions: UK survey evidence

Despite theoretical developments in recent years, our understanding of corporate capital structure remains incomplete. Prior empirical research has been dominated by archival regression studies which are limited in their ability to fully reflect the diversity found in practice. The present paper reports on a comprehensive survey of corporate financing decision-making in UK listed companies. A key finding is that firms are heterogeneous in their capital structure policies. About half of the firms seek to maintain a target debt level, consistent with trade-off theory, but 60 per cent claim to follow a financing hierarchy, consistent with pecking order theory. These two theories are not viewed by respondents as either mutually exclusive or exhaustive. Many of the theoretical determinants of debt levels are widely accepted by respondents, in particular the importance of interest tax shield, financial distress, agency costs and also, at least implicitly, information asymmetry. Results also indicate that cross-country institutional differences have a significant impact on financial decisions

Interdependensi Antara Keputusan Investasi, Keputusan Pendanaan Dan Keputusan Dividen

This paper examined a comprehensive test of the interdependencies amonginvestment decisions, financing decisions and dividend decisions. Three simultaneous equationmodels were used. By applying Two Stage Least Square (2-SLS) technique to 122 firms listed onIndonesian Stock Exchange, it was found out that there was no significant interdepenciesamong firm's investment decisions, financing decisions and dividend decisions. Our resultsuggested the causality flow between firm's investment decisions and dividend decisions wasbidirectional and positive, the causality flow between investment and financing decisions wasbidirectional and positive, while the causality flow between financing and dividend decisionswas bidirectional and negative

Fixing the Delta: How Will We Pay for It?

Reviews proposals for preserving the Sacramento-San Joaquin Delta, such as levee repair and construction of new reservoirs; the debate over beneficiary financing; and implications of recent court decisions. Identifies feasible beneficiary payment options

The role of fundamental Q and financing frictions in agricultural investment decisions: an analysis pre and post financial crisis

This paper uses a fundamental Q model of investment to consider the role played by financing frictions in agricultural investment decisions, controlling econometrically for censoring, heterogeneity and errors-in-variables. Our findings suggest that farmer's investment decisions are not driven by market fundamentals. We find some evidence that debt overhang restricts investment but investment is not dependent on liquidity or internal funds. The role of financing frictions in determining investment decisions changes in the post-financial crisis period when debt overhang becomes a significant impediment to farm investment. The evidence suggests that farmers increasingly rely on internal liquidity to drive investment. Finally, we find no evidence that farmers use off-farm capital to fund on-farm investment.Credit Constraints, Firm Level Investment, Tobin's Q, Debt

The role of financing frictions in agricultural investment decisions: an analysis pre and post financial crisis

This paper uses a fundamental Q model of investment to consider the role played by financing frictions in agricultural investment decisions, controlling econometrically for censoring, heterogeneity and errors-in-variables. Our findings suggest that farmer's investment decisions are not driven by market fundamentals. We find some evidence that debt overhang restricts investment but investment is not dependent on liquidity or internal funds. The role of financing frictions in determining investment decisions changes in the post-financial crisis period when debt overhang becomes a significant impediment to farm investment. The evidence suggests that farmers increasingly rely on internal liquidity to drive investment. Finally, we find no evidence that farmers use on-farm capital to fund on-farm investment.Credit Constraints, Firm Level Investment, Tobin's Q, Debt, Agricultural Finance, G31, G32, F34,

EXTERNAL BORROWING – A SOLUTION IN OVERCOMING THE CURRENT ECONOMIC CRISIS?

The government decisions to call, in recent years, more and more reimbursable financing gave birth to fierce reactions among politicians and economy specialists. The present article aims to analyze how the external borrowing may be a solution to overcome the difficult situation where we are.government, financing, external borrowing, economic crisis