Abstract
Research on the capital structure of family firms has flourished in recent years, but the impact of performance aspiration and family ownership together on capital structure remains inadequately investigated. Therefore, the purpose of this study is to explore the impact of family ownership and under-aspiration performance and their interaction on capital structure. Panel data estimations were applied with a unique dataset of 3.857 observations from 387 public firms in Vietnam from 2010 to 2020 (134 family firms and 253 non-family firms). The results reveal that family ownership and under-aspiration performance each has a positive effect on capital structure. However, under-aspiration performance negatively moderates the positive effect of family ownership on capital structure. These findings contribute to a stream of studies on the capital structure of family firms by exploring the role of under-aspiration performance, as well as provide important implications for shareholders, managers and debtors in financial management.
Highlights
Over the past 20 years, capital structure and family ownership have been emerged as one of the most popular research issues in finance and management (Hansen & Block, 2021)
This study examines how under-aspiration performance, family ownership and their interaction affect capital structure by combining capital structure theories and a behavioral agency approach
Using the data collected from publicly traded Vietnamese firms, the estimation results show that both under-aspiration performance and family ownership have a positive impact on capital structure, but their interaction has a negative relationship with capital structure
Summary
Over the past 20 years, capital structure and family ownership have been emerged as one of the most popular research issues in finance and management (Hansen & Block, 2021). We know that family firms make different financing decisions than non-family firms because of different agency costs, bankruptcy costs, and information asymmetry (Molly et al, 2019).
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