Cash holdings in family firms: CEO identity and implications for firm value

摘要

We investigate the cash holdings policy of family firms and examine potential value implications. Family firms hold more cash than other firms, with an average difference of 2.3% of total assets. This result is driven by firms managed by heir CEOs. While the cash holdings policy of first-generation family firms is more sensitive to firm risk, consistent with founders' increased risk aversion, that of later-generation firms is more sensitive to information asymmetry and agency conflicts. Heir CEOs' cash policies destroy value, as the marginal value of an additional Euro suffers from a 38.3-cent discount, on average, relative to non-family firms.