Financial Decision Making in Family Firms: An Adaptation of the Theory of Planned Behavior. (December 2014)

• Record Type: Journal Article
• Authors: Koropp, Christian; Kellermanns, Franz W.; Grichnik, Dietmar; Stanley, Laura
• Is Part Of: Family business review. Volume 27:Number 4(2014:Dec.)
• Page Start: 307
• Page End: 327
• Publication Date: 2014-12
• Subjects: family firms -- family norms -- financial attitudes -- financial decision making -- theory of planned behavior; Family-owned business enterprises -- United States -- Periodicals; Home labor -- United States -- Periodicals; Small business -- United States -- Periodicals; New business enterprises -- United States -- Periodicals; 658.045
• DOI: 10.1177/0894486514522483
• Languages: English
• ISSNs: 0894-4865

Abstract

Adapting the theory of planned behavior to the area of financial choices in family firms, we argue that these choices in family firms are largely affected by family norms, attitude, perceived behavioral control, and behavioral intentions. A time-lagged sample, estimated via structural equation modeling of 118 German family firms, supports a behavioral approach to the study of financing decisions. Specifically, we show that family norms and attitude toward external debt and external equity affect behavioral intention to use the respective financing choices, which in turn affects financing behavior. Perceived behavioral control, however, was shown to negatively affect behavioral intentions to use external equity and was positively related to the use of internal funds. Implications of these capital structure decisions and ideas for future research are discussed.