Impact of Family Control and Influence on Financing Decisions of Family Firms: A Case of Pakistani Family Firms in the Prospective of Socioemotional Wealth

This study focuses on the financing choices of family firms under the umbrella of Socioemotional wealth. It investigates how a family firm makes its financing policy based on persuasion of a non-financial goal which is the need to maintain family control over the business. In the context of non-financial Pakistani listed firms in the Pakistan Stock Exchange, with data range starts from 2009 to 2020. Our results show that family firms with a high need to maintain their family control over the business have high debt levels. Similarly having family representation on the board shows a positive relationship with debt financing. We also conclude that having a family CEO is also linked with the use of extensive debt. Our findings are consistent with the view that Socioemotional wealth is an important determinant of making important financial decisions.