The aim of the paper is two-fold. First, we pretend to analyze the investment sensitivity to internally generated cash flows as a driver of VC involvement in FCBs: in particular, we argue that VC will invest in FCBs when they are severely affected by information asymmetries and, as a consequence, their investment are highly driven by the availability of internal capital. Second, we pretend to ascertain to what extent VC involvement contributes to reduce the dependency between investments and internal cash flow. We distinguish between firms in which the founding firm is running the business (first generation FCBs) and firms in descendant generations (following generations FCBs) assuming that there are subject to a different degree of information asymmetries.
Investment-Cash Flow Sensitivity in Family-Controlled Firms and the Impact of Venture Capital Funding
CROCE, ANNALISA;
2013-01-01
Abstract
The aim of the paper is two-fold. First, we pretend to analyze the investment sensitivity to internally generated cash flows as a driver of VC involvement in FCBs: in particular, we argue that VC will invest in FCBs when they are severely affected by information asymmetries and, as a consequence, their investment are highly driven by the availability of internal capital. Second, we pretend to ascertain to what extent VC involvement contributes to reduce the dependency between investments and internal cash flow. We distinguish between firms in which the founding firm is running the business (first generation FCBs) and firms in descendant generations (following generations FCBs) assuming that there are subject to a different degree of information asymmetries.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
