Strategic decisions of family firms on cash accumulation
Given the particular strengths, weaknesses, and peculiarities of family firms as well as the importance of liquidity in today’s marketplace, we analyze the distinct characteristics and strategies of family businesses related to the amount of cash a firm holds. We look beyond the traditional factors...
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| Tipo de documento: | artigo |
| Estado: | Versão publicada |
| Data de publicação: | 2015 |
| País: | Brasil |
| Recursos: | Fundação Getulio Vargas (FGV) |
| Repositório: | Revista de Administração de Empresas |
| Idioma: | inglês |
| OAI Identifier: | oai:ojs.periodicos.fgv.br:article/52962 |
| Acesso em linha: | https://periodicos.fgv.br/rae/article/view/52962 |
| Access Level: | Acceso aberto |
| Palavra-chave: | Family firms Ownership Cash Liquidity Family control Empresas familiares Propiedad Efectivo Liquidez Control familiar Propriedade Caixa Controle familiar |
| Resumo: | Given the particular strengths, weaknesses, and peculiarities of family firms as well as the importance of liquidity in today’s marketplace, we analyze the distinct characteristics and strategies of family businesses related to the amount of cash a firm holds. We look beyond the traditional factors that influence decisions related to cash management to examine factors that are particularly important for family firms. Specifically, we outline the relevance of strategic decisions guided by family firms’ conservatism, flexibility, long-term view, and the active control that they have over family members. To our knowledge, no prior studies exist regarding family firms and their strategic adjustment of cash holding. Therefore, we investigate whether the ownership structure of the firm (through the presence of a controlling family) moderates decisions on cash holding. We found that family firms tend to accumulate cash for strategic reasons and as a result of their own idiosyncrasies. Thus, family firms can achieve optimal cash accumulation more efficiently than non-family firms. |
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