Capital structure in family firms: the role of innovation activity and institutional investors

What is it about?

In this manuscript,700 family firms have been studied for ten years; we show that institutional investors don't help family businesses obtain more debt funds except when controlling the Lombardy region. Innovation activity is shown to have a positive relationship with financial leverage, but until a certain level of innovation activity, otherwise, the firm's operations become risky, and banks are reluctant in grating new debt. Thus innovation could be a double-edged weapon.

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