FAMILY BUSINESS: TRADITIONAL AND INNOVATIVE SOURCES OF FINANCING
Journal
Economic Development, JOURNAL OF THE INSTITUTE OF ECONOMICS - SKOPJE
Date Issued
2018-06
Author(s)
Klimentina Poposka, Iskra Stancheva Gigov
Abstract
Family businesses represent a major part in economy, hence in order to
acquire profit and accelerate growth, they need durable financing. Access to
capital is not always an easy for such kind of businesses, hereafter financing can
be very quiet difficult and challenging, particularly from the family businesses
view, maintaining control over their company as a key success factor, which
can make financing options even more limited. Optimal combination of
traditional and innovative financial sources might trigger the family business
to switch from traditional toward innovative sources of financing, heavily
bearing in mind the influence of such financing toward limitation and reducing
the control and ownership structure in family businesses. This paper aim to
determine which are the most used sources of financing by family businesses,
and if they prefer to use traditional or non-traditional way of financing. The
results show that there are an increasing number of non-traditional sources
of capital such as family offices and high net worth individuals which are
increasingly favored source of family business finance.
acquire profit and accelerate growth, they need durable financing. Access to
capital is not always an easy for such kind of businesses, hereafter financing can
be very quiet difficult and challenging, particularly from the family businesses
view, maintaining control over their company as a key success factor, which
can make financing options even more limited. Optimal combination of
traditional and innovative financial sources might trigger the family business
to switch from traditional toward innovative sources of financing, heavily
bearing in mind the influence of such financing toward limitation and reducing
the control and ownership structure in family businesses. This paper aim to
determine which are the most used sources of financing by family businesses,
and if they prefer to use traditional or non-traditional way of financing. The
results show that there are an increasing number of non-traditional sources
of capital such as family offices and high net worth individuals which are
increasingly favored source of family business finance.
Subjects