Effect of financial constraints on the growth of family and nonfamily firms in Turkey
Abstract This study examined whether family-owned firms have advantages for accessing external financial sources for growth. Especially in developing countries with imperfect markets, firms can face difficulties accessing external financing sources; however, family-owned firms might have some advant...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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SpringerOpen
2020-07-01
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| Series: | Financial Innovation |
| Subjects: | |
| Online Access: | http://link.springer.com/article/10.1186/s40854-020-00188-z |
| _version_ | 1818578623248990208 |
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| author | Bahadır Ergün Ömer Tuğsal Doruk |
| author_facet | Bahadır Ergün Ömer Tuğsal Doruk |
| author_sort | Bahadır Ergün |
| collection | DOAJ |
| description | Abstract This study examined whether family-owned firms have advantages for accessing external financial sources for growth. Especially in developing countries with imperfect markets, firms can face difficulties accessing external financing sources; however, family-owned firms might have some advantages in this regard over nonfamily firms. Unlike previous studies, this study considered that, in the Turkish context, nonfamily firms are financially constrained while family firms are not. To examine this hypothesis, we used the generalized method of moments (GMM) approach to analyze panel data from 2006 to 2017. The findings showed that financing constraints were a significant obstacle to growth for nonfamily-owned manufacturing firms while the effect was not present for family firms since they are controlled by large, well-established family groups. These results elucidate the relationship between corporate ownership and growth among Turkish firms, especially those with strong links to large family-owned corporations. The results also revealed that reputation and network may facilitate easier access to external financing sources, especially when considering the “Big Six” family ties of firms. |
| first_indexed | 2024-12-16T06:48:45Z |
| format | Article |
| id | doaj.art-8e61c81bff124f2abd670b97eeea0854 |
| institution | Directory Open Access Journal |
| issn | 2199-4730 |
| language | English |
| last_indexed | 2024-12-16T06:48:45Z |
| publishDate | 2020-07-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Financial Innovation |
| spelling | doaj.art-8e61c81bff124f2abd670b97eeea08542022-12-21T22:40:27ZengSpringerOpenFinancial Innovation2199-47302020-07-016112410.1186/s40854-020-00188-zEffect of financial constraints on the growth of family and nonfamily firms in TurkeyBahadır Ergün0Ömer Tuğsal Doruk1Department of International Trade and Finance, Adana Alparslan Türkeş Science and Technology UniversityDepartment of Business Administration, Adana Alparslan Türkeş Science and Technology UniversityAbstract This study examined whether family-owned firms have advantages for accessing external financial sources for growth. Especially in developing countries with imperfect markets, firms can face difficulties accessing external financing sources; however, family-owned firms might have some advantages in this regard over nonfamily firms. Unlike previous studies, this study considered that, in the Turkish context, nonfamily firms are financially constrained while family firms are not. To examine this hypothesis, we used the generalized method of moments (GMM) approach to analyze panel data from 2006 to 2017. The findings showed that financing constraints were a significant obstacle to growth for nonfamily-owned manufacturing firms while the effect was not present for family firms since they are controlled by large, well-established family groups. These results elucidate the relationship between corporate ownership and growth among Turkish firms, especially those with strong links to large family-owned corporations. The results also revealed that reputation and network may facilitate easier access to external financing sources, especially when considering the “Big Six” family ties of firms.http://link.springer.com/article/10.1186/s40854-020-00188-zFinancing constraintsFirm growthTurkish manufacturing sectorGMM |
| spellingShingle | Bahadır Ergün Ömer Tuğsal Doruk Effect of financial constraints on the growth of family and nonfamily firms in Turkey Financial Innovation Financing constraints Firm growth Turkish manufacturing sector GMM |
| title | Effect of financial constraints on the growth of family and nonfamily firms in Turkey |
| title_full | Effect of financial constraints on the growth of family and nonfamily firms in Turkey |
| title_fullStr | Effect of financial constraints on the growth of family and nonfamily firms in Turkey |
| title_full_unstemmed | Effect of financial constraints on the growth of family and nonfamily firms in Turkey |
| title_short | Effect of financial constraints on the growth of family and nonfamily firms in Turkey |
| title_sort | effect of financial constraints on the growth of family and nonfamily firms in turkey |
| topic | Financing constraints Firm growth Turkish manufacturing sector GMM |
| url | http://link.springer.com/article/10.1186/s40854-020-00188-z |
| work_keys_str_mv | AT bahadırergun effectoffinancialconstraintsonthegrowthoffamilyandnonfamilyfirmsinturkey AT omertugsaldoruk effectoffinancialconstraintsonthegrowthoffamilyandnonfamilyfirmsinturkey |