Abstract
This paper re-examines the factors influencing debt-financing decisions in family firms, considering the importance of socioemotional wealth and heterogeneity issues. In particular, we explore the board of directors and generational stage as key explicative factors of heterogeneity in family businesses. Focusing on a large sample of Spanish family firms, we estimate a partial least squares model, whose results show that the higher the level of family involvement on the board of directors and the lower the generational stage, the higher the debt level of the family firm. Consequently, in addition to traditional determinants of the level of debt, the above variables should be considered to better understand the heterogeneous debt-financing decisions of family firms, and this has practical implications for them and their internal and external relationships.
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