Family control and investment-cash flow sensitivity: Empirical evidence from the Euro zone

► We examine how family control moderates the sensitivity of investment to cash flow. ► Family firms have lower investment-cash flow sensitivities in the Euro zone. ► The lower sensitivity is due to family firms with no ownership-control deviations. ► Family management is needed to reduce investment-cash flow sensitivities. ► Second blockholders in family firms affect their investment-cash flow sensitivity.