Abstract
Abstract Nowadays financialization seems to be an inherent and obvious phenomenon and it appears to have infected all industrialized economies. Within general phenomenon of financialization, three areas should be indicated: financialization as a system of capital accumulation, financialization of business entities and financialization of every day-life. In our paper we try to investigate family businesses that are unique due to the overlap of family and business subsystems in one entity. More specifically, we undertake to find out whether intertwining of family values with business objectives can influence the level of absorption of various finance instruments that are offered on nowadays financial market. Analysis revealed a few statistically significant relationships between perception of family firm objectives and absorption of basic and sophisticated finance instruments. It is the first to suggest, that family firms which are intrinsically-oriented, i.e. those more willing to keep independence or to keep long term survival, are less prone to absorb sophisticated finance instruments, e.g. private equity, venture capital, hybrid capital or they are less keen to become a public company. On the other hand, if a family firm is more oriented towards risk minimisation or keeping long term growth, then it is also more open for absorption of advanced finance instruments.
Highlights
Financialization as a common phenomenon, observed and noticed in almost each economy, affects majority its spheres that are analysed in terms of macro and microeconomics and influences the symbolic and cultural dimension of the societies [6], [33]
This intertwining of family values with business objectives can influence the level of absorption of various finance instruments that are offered in today’s financial market
Our research reveals that a family business which is more concerned about family goals such as maintaining the company’s independence, its existence and employment of family members in the company, is less likely to absorb more sophisticated financial instruments and be the subject to financialization
Summary
Financialization as a common phenomenon, observed and noticed in almost each economy, affects majority its spheres that are analysed in terms of macro and microeconomics and influences the symbolic and cultural dimension of the societies [6], [33]. With the growth of the importance of financial markets, companies have been gaining various opportunities to absorb new finance instruments and services from domestic and international financial markets through cross-border capital flows [5], [9] This progressive adjustment of all enterprises’ relevant dimensions (formal control, accounting, strategy, structures, work organization, personnel policies, internal culture, etc.) in order to accommodate an increasing orientation towards financial accumulations can be understood as their financialization [30]. We investigate family businesses as some kind of specific firms in the economy, due to the overlap of family and business subsystems in one entity [11] With our point, this intertwining of family values with business objectives can influence the level of absorption of various finance instruments that are offered in today’s financial market.
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