News: Seminari

Seminario di Mircea Epure

ore 15.30 Sala Seminari – I° piano, Palazzo Levi Cases, Via del Santo 33

09.11.2017

Family control and trust during a financial crisis

Seminario di Mircea Epure, Universitat Pompeu Fabra, Barcelona

Recent works suggest that, by improving access to trade financing, generalized trust may alleviate the adverse impact of financial crises on business activities. Exploiting geographic variations in trust across Italian regions and the occurrence of the financial crisis in a difference-in-differences setting, we document that while trust alleviates the negative effect of a crisis on the profitability of non-family firms, it aggravates the negative effect for family firms. Trust is particularly harmful for family businesses with a high level of family representation in governance positions. Studying the financing channel, we further show that trust impairs the ability of family firms to access debt from suppliers in times of crisis.