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Board Connections and Debt Structure in Family Firms

45 Pages Posted: 12 Aug 2016 Last revised: 16 Sep 2017

Mario Daniele Amore

Bocconi University

Stefano Caselli

Bocconi University - Department of Finance

Paolo Colla

Bocconi University - Department of Finance; Bocconi University - BAFFI Center on International Markets, Money, and Regulation

Guido Corbetta

Bocconi University - Department of Management and Technology

Date Written: September 13, 2017

Abstract

We investigate the effect of board connections on the debt structure of family firms. Using a comprehensive panel data set from Italy, our empirical evidence indicates that independent directors who sit on multiple boards facilitate family firms’ access to external debt, mostly in the form of trade debt. Exploiting geographic and temporal variations in credit supply, we find that board connections improve the ability of firms to withstand funding shortages. Overall, our findings are consistent with the view that independent directors sitting on multiple boards act as providers of information and resources along the supply chain.

Keywords: family firms, boards, debt, non-family directors, board interlocks

JEL Classification: G32, G34

Suggested Citation

Amore, Mario Daniele and Caselli, Stefano and Colla, Paolo and Corbetta, Guido, Board Connections and Debt Structure in Family Firms (September 13, 2017). Available at SSRN: https://ssrn.com/abstract=2821465

Mario Daniele Amore

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

Stefano Caselli

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

Paolo Colla (Contact Author)

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

Bocconi University - BAFFI Center on International Markets, Money, and Regulation ( email )

Milano, 20136
Italy

Guido Corbetta

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

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