The relationship between innovation and the financial structure with consideration of the moderating role of the generational stage of family businesses.

This research aims to empirically test the relationship between the financial structure and innovation in family businesses. The notion of innovation is, indeed, a sustainability factor for family businesses which favors the conceptual incorporation into the capital structure of family businesses. This paves us the way to analyze the relationship by mobilizing the theory of resources. This research also enables us to verify the moderating role of the generational stage in this relationship. The model estimates are based on a sample of panel data collected over the period 2003-2012 for 100 unlisted French Family firms. The main results indicate that all the traditional determinants of the financial structure, except ROA, play an important role in the financing policy of these firms. We can perceive that innovation can affect the choice of financing and can, also, play a significant role in the choice of debt maturity. Moreover, the financial structure of these family businesses slowly but surely converges towards its target level. “Corporate Governance: Search for the Advanced Practices” Rome, February 28, 2019