Do family firms pay less for external funding?

We examine the impact of family’s presence on the cost of raising external funds by family-run enterprises. Using a sample of Australian publicly listed firms, we find a significantly negative relation between cost of newly raised capital and family presence. Moreover, we show that this relationship varies with the quality of corporate governance and the quality of firm’s information environment. Further, we conduct several robustness checks and consistently find that our main results remain unchanged. Overall, our evidence suggests that family firms have easier access to external financing fostered by family involvement in the ownership and control