Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1019431 | Journal of Business Venturing | 2011 | 17 Pages |
Abstract
New ventures often require debt financing but face difficulties convincing lenders of their creditworthiness because of agency problems. Researchers have shown that social capital can help small firms reduce lenders' agency concerns but new ventures do not yet have their own social capital. We propose that family involvement increases a venture's ability to borrow family social capital for the purpose of obtaining debt financing. Empirical tests with 1267 new ventures suggest that family involvement directly and indirectly improves a new venture's access to debt financing.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Business and International Management
Authors
Jess H. Chua, James J. Chrisman, Franz Kellermanns, Zhenyu Wu,