Paper 4 | Listed Family Firms and Financial Distress

Abstract

Using a comprehensive dataset of 18,147 publicly traded firms across 35 OECD countries from 2011 to 2023, we examine the impact of family ownership on financial distress risk. Consistent with socioemotional wealth theory, family firms are less likely to experience financial distress, particularly in high-stress environments, such as industries with a high share of distressed assets and during post-2020 recessions. Further analysis suggests that conservative leverage policies contribute to this capacity of resilience. Our findings highlight the stabilizing role of family ownership during crisis periods.