Investment decisions of family firms in the three largest euro countries: the role of the financial crisis

This study aims to investigate the impact of family ownership on the investment-cash flow sensitivity relationship. Our main hypotheses are tested through fixed effects regression analysis on panel data of French, German, and Italian listed firms over the 2007-2015 timeframe. The main findings suggest that family ownership is more likely to reduce the investment-cash flow sensitivity, suggesting more family firms’ more efficient investment behaviors. Moreover, during the financial crisis, family firms are particularly able to collect external funds to undertake investment projects, even if the internally generated cash-flow is not adequate to sustain investment policies