Investment Decisions in Unlisted Family Businesses

Abstract

This article contributes to understanding the investment decision in the unlisted family business (UFB). It particularly highlights the roles of the performance target and long-term survival goal, providing empirical support both for the Prospect Theory and for the Post Keynesian Theory developed by Myron Gordon. Results clearly show that the UFB’s main objective is very far removed from that of maximizing shareholders’ financial wealth. Overall, this article shows the necessity to consider the goal of long-term survival as a key factor for developing a governance theory that is relevant to UFBs.

Keywords: Investment decision; Unlisted family business; Prospect theory; Survival goal