Family businesses and non-family equity: literature review and avenues for future research

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Family firms commonly prefer internal funding and retention of control. Under certain circumstances, however, equity investments from outside the family can be a relevant alternative source of capital. To facilitate further knowledge about the interaction of family-owned businesses and external equity investors, the present work reviews 42 studies and suggests possible directions for future research. Results reveal that extant studies focus mainly on five key areas—corporate finance, contract design and collaboration, succession and exit route, strategy and performance, and corporate governance. Moreover, the paper discusses various gaps in the extant work and presents three opportunities for future research in a detailed manner. These include a comparison of different types of investors in the context of family-owned businesses, an investigation of minority investor exits from family firms, and an analysis of the impact of investors on family firm boards. All in all, the findings can guide the future development of this emerging field of research and have implications for theory and practice.
Original languageEnglish
JournalManagement Review Quarterly
Issue number1
Pages (from-to)31-63
Number of pages33
Publication statusPublished - 01.02.2017

    Research areas

  • Management studies - Family firms, Family investors, Private equity, Capital structure, Literature review

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