Abstract
Family firms form the backbone of most of the world’s economies. While the issues surrounding family firms are diverse, gender diversity and its impact on the strategic and financial decisions of such firms is a topic that has generated significant debate in recent years. In particular, one of the most crucial unresolved questions is whether or not increasing the female presence in the family firms’ corporate governance bodies would be beneficial for improving their internal functioning. To shed new light on these issues, our study aims to examine the influence of gender diversity on the level of indebtedness of Spanish agri-food family firms. Specifically, and applying a risk-aversion perspective, the research goal is to analyse whether the female presence in corporate governance structures (board of directors, top management team and general shareholders’ meeting) influences the level of firm indebtedness. To test the suggested relationships, ordinary least square regression models were applied to a sample of 137 firms. The final sample was obtained by combining quantitative data from the SABI database and qualitative data from a survey conducted by the Spanish Institute of Family Firms and the Spanish Network of Family Business Chairs. This study reveals an inverse relationship of female presence in the board of directors, in the top management team, and in the general shareholders’ meeting on the level of indebtedness of Spanish agri-food family firms. In other words, the findings show that female presence in corporate governance structures contributes to enhanced business management behaviour and, thus, to a better utilisation of firms’ financing strategies. The obtained results have very important practical and social implications, insofar as they contribute to the building of a more inclusive and sustainable business world, aimed at reducing gender inequality at top positions in firms.
Highlights
In recent decades the activity of family firms has attracted the interest of academics, professionals, and managers worldwide, among other reasons, due to family firms’ great contribution to GDP and employment in most economies around the world [1,2,3], which explains the significant increase in research on this type of business.The concept of the family firm is very ambiguous, so the definitions are generally categorized as broad, intermediate, and restrictive [4]
We found no relationship of the level of indebtedness on female presence in the board of directors, top management team, and general shareholders’ meeting, claims about reverse causality are ameliorated [96]
The main purpose of this paper was to examine whether the female presence in three corporate governance bodies of family firms in the Spanish agri-food industry influences the level of firm indebtedness
Summary
The concept of the family firm is very ambiguous, so the definitions are generally categorized as broad, intermediate, and restrictive [4]. The only requirement for a business to be classified as a family firm is that the control of strategic decisions rests in the hands of family members, as well as an explicit desire for this control to be maintained in the future. The intermediate definition includes family firms—those in which the founder or his/her descendants control the business and have a direct, but not exclusive, involvement in strategic decision-making. In the most restrictive definition, family firms are those businesses in which several generations of a given family dynasty have an active presence and control in both the firm ownership and the firm management. Family firms are conceptualized as businesses “dominantly controlled by a family with the vision to potentially sustain family control across generations” [5] (p. 22)
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