Financing Behavior Of Family Firms-An Evidence From Chinese Listed Firms

Family firms constitute a major percentage of global economy,therefore scholars and researchers have put a lot efforts to explain and understand this segment of the economy.Similarly it has been identified by many scholars that family firms operate in a unique way while conducting their business operations.Many theories and studies suggested that family firms consider many non-economic objectives as a key factor for the business.They also suggest that unlike non-family firms who have goal of maximizing the value of shareholders,family firms preserve these non-economic objective such as family control,family identity,and family succession.And these non-economic factors play a key role in the decision making process of family firms like capital structuring decisions.This research is focused to identify the financing behavior of Chinese listed family firms.And with the help of Wind Data Base,876 Chinese listed family firms are studied.After reviewing the relevant literature,7 hypotheses are developed which are tested with a series of regression models.Different financing options available to Chinese family firms are identified and each financing source is being tested in these model to find out the answers to the designed research questions.Similarly with the help of these regression models and interaction graphs,the study analyzed the moderator effects of firm size and firm age as well.The results showed that Chinese family firms behaved differently as compared to the global family firms.Unlike global firms,the primary financing choice of Chinese family firms was found to be debt financing like,Short-term debts,Long-term debts,Trade Credits and Equity Financing.