This Article Full Text (OnlineFirst PDF) All Versions of this Article: 0894486509338291v1 22/4/333    most recent Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Add to Saved Citations Download to citation manager Request Permissions Request Reprints Add to My Marked Citations Citing Articles Citing Articles via Scopus Google Scholar Articles by Steijvers, T. Articles by Voordeckers, W. Social Bookmarking                         What's this?

Private Family Ownership and the Agency Costs of Debt

Hasselt University

^* To whom correspondence should be addressed. E-mail: wim.voordeckers{at}uhasselt.be.

	Abstract

This article presents empirical evidence on the agency costs of debt in private family firms by examining the explicit (interest rate) as well as implicit (business and personal collateral) bank loan price simultaneously. Using a cross sectional sample of lines-ofcredit of the NSSBF database, family firms appear to be more likely to pledge personal collateral which suggests that agency costs of debt are higher in family firms. Hence, personal collateral seems to be a better instrument than interest rates or business collateral for financial institutions to cope with the specific agency problems (e.g. self-control problems and negative effects of parental altruism) in family firms.

First published on June 30, 2009, doi:10.1177/0894486509338291

Family Business Review 2009;22:333.

A more recent version of this article appeared on December 1, 2009


CiteULike    Complore    Connotea    Del.icio.us    Digg    Reddit    Technorati    Twitter    What's this?