The determinants of cash flow sensitivity of cash: The family ownership effect

M. Belén Lozano, Serhat Yaman

Research output: Contribution to journalArticle in a journalpeer-review

6 Scopus citations


This paper investigates firms’ cash flow sensitivity of cash (CFSC) in a European setting. We examine the differing effects of financial constraints and income and substitution effects on CFSC in the context of the family ownership structure. When examining the shareholders’ behavior within the ownership structure of family firms, we find a positive CFSC level for our full sample. Our results show a significant connection between the family ownership structure and CFSC's determinant factors: the higher (lower) sensitivity for the firms with more (less) financial constraints suggests that family firms are financially less constrained than non-family firms. Additionally, contrary to prior literature, we find income and substitution effects have a nonnegative effect on CFCS. We explain this finding from a productivity shocks perspective related to the financial crisis, which occurs during our analysis period.
Original languageEnglish
Article number101204
JournalResearch in International Business and Finance
StatePublished - Oct 2020
Externally publishedYes

Bibliographical note

Publisher Copyright:
© 2020 Elsevier B.V.


  • Agency costs
  • Cash holding
  • Ownership structure
  • Productivity shocks
  • Sensitivity


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