DEBT OF FAMILY FIRMS: A COMPARISON BASED ON ACCOUNTING INDICATORS

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Olivier Colot, Mélanie Croquet

DOI:10.22495/cocv6i3p5

Abstract

The financial behavior of family firms represents a field of research that has been little explored up to the present time. In this context, we wanted to contribute to understanding the problems linked to financing in family firms, and more specifically to family SMEs in Belgium, because they represent a major part of the Belgian economy. This paper uses paired samples methodology to compare the financial debt of family SMEs with that of non-family SMEs. The results show that family SMEs seem to be more indebted. Among all of the ratios tested, six indicators were statistically significant. The theory of the agency cost of debts seems to be confirmed for Belgian family SMEs.

Keywords: Family Firm, Debt, SMEs

How to cite this paper:O Colot, O., & Croquet, M. (2009). Debt of family firms: A comparison based on accounting indicators. Corporate Ownership & Control, 6(3),53-60 . http://doi.org/10.22495/cocv6i3p5