The Impact of Family Ownership on Investment Decisions

Rizzotti Davide, Frisenna Claudia, Tragno Federica

Despite a long stream of research on family businesses behavior and conduct, evidence on the heterogeneity of investment choices among family firms is yet quite unexplored. This study investigates the impact of family ownership on the firm’s investment decisions, examining the potential variations between the first and later generations of family firms. Our findings show that, generally, family-owned firms are less likely to undertake investment projects with respect to non-family firms. Nevertheless, we find that family member CEOs positively affects investment decisions, leading to higher investment expenditure. Moreover, we find that also the presence of a successor CEO has a positive effect on the level of investment expenditure although the impact is weaker.

Key-Words: Entrepreneurship and Family Business, Founder CEO, Family firm, Stewardship, Successor CEO, Investment Decisions

APPENDIX Variables Description

TABLE 1 – Sample Selection Process

TABLE 2 – Descriptive Statistics

TABLE 3 – Correlation Matrix

TABLE 4 – Regression of Capex on family ownership