Family control, financial flexibility and crisis response in French listed firms

Family control, financial flexibility and crisis response in French listed firms | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Article Family control, financial flexibility and crisis response in French listed firms Ahlem NAJAH, faten chibani, Amina Hamdouni This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-9116080/v1 This work is licensed under a CC BY 4.0 License Status: Under Review Version 1 posted 5 You are reading this latest preprint version Abstract Family-controlled firms are often described as financially conservative, yet they also appear reluctant to issue equity when external finance becomes necessary. The study examines whether these patterns can be understood through a common governance mechanism: family control changes the relative costs of dilution and financial distress. Capital-structure choices in family firms are therefore treated not only as responses to taxes, information frictions, or valuation windows, but also as governance decisions tied to continuity, authority, and organisational autonomy. Five expectations follow from this argument: lower leverage, slower leverage adjustment, stronger debt use when financing deficits emerge, a weaker market-timing imprint, and a stronger move to preserve financial flexibility during systemic shock. These expectations are evaluated in an unbalanced panel of French listed non-financial firms over 2000–2024, using fixed-effects models, dynamic panel estimators, and crisis-period analyses centred on COVID-19. Across the core specifications, family-controlled firms hold less leverage on average, adjust more slowly, finance a larger share of deficits with debt, display a weaker long-run market-timing imprint, and delever relative to comparable non-family firms during COVID-19. The evidence is consistent with the view that capital structure in family firms operates as a governance mechanism through which organisations protect discretion in normal times and preserve response capacity under systemic stress. Earth and environmental sciences/Environmental social sciences Business and commerce/Finance Social science/Finance family control corporate governance financial flexibility crisis response organisational autonomy France Full Text Additional Declarations No competing interests reported. Supplementary Files TargetTables720.csv SampleandCodingProtocol.docx DocumentationandCrosswalk.xlsx READMEAnonymized.docx Cite Share Download PDF Status: Under Review Version 1 posted Reviewers invited by journal 26 Mar, 2026 Editor assigned by journal 26 Mar, 2026 Editor invited by journal 26 Mar, 2026 Submission checks completed at journal 24 Mar, 2026 First submitted to journal 24 Mar, 2026 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. 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