Is family control relevant for corporate cash holding policy?

Rodrigo F. Durán, M. Belén Lozano, Serhat Yaman

Research output: Contribution to journalArticle in a journalpeer-review

20 Scopus citations


Using a sample of Western European firms, we confirm the precautionary motive for holding cash as family-controlled firms’ desire to perpetuate the family legacy for future generations motivates them to accumulate more cash than their non-family counterparts. We also show that, given family-controlled firms’ long-term perspective, they focus on cash flow volatility rather than cash flow level. Finally, the relation between financing constraints and cash holdings is not homogeneous: financially constrained family-controlled firms hold higher levels of cash than financially constrained non-family firms. Overall, these results suggest that family firms’ cash holding policy is the result not of a specific financial outcome but rather on the strategic objectives of the firm.
Original languageEnglish
Pages (from-to)1325-1360
Number of pages36
JournalJournal of Business Finance and Accounting
Issue number9-10
StatePublished - 28 Sep 2016
Externally publishedYes


  • Euro zone
  • G32
  • cash flow volatility
  • cash holding
  • family firms
  • liquidity


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