Determinants of Capital Structure: Family Businesses versus Non-Family Firms

The study applies a GMM technique to a panel data sample of 2,093 private Spanish companies, 1,434 of which are family firms to investigate whether or not the capital structure of family business differs from that of non-family firms. The results show that family firms are more indebted than non-family firms. Moreover, the factors that have an influence on capital structure have different impacts on family firms and non-family firms. Furthermore, our findings also reveal that the financial structure (leverage ratio) of family firms changes with the size of the business and the firm's life cycle, and that the variables that explain the financial behaviour of the family firms have different levels of importance, depending on the size of the business and the firm's life cycle.