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This study examines how stewardship might mediate the influence of family ownership on firm financial performance. The authors argue that differences in financial performance may reflect not only the family's influence but also the prevalence of a stewardship-oriented culture, across varying degrees of family influence.

The measure of family influence uses the F-PEC scale: family [F], power [P], experience [E] and culture [C]. It supports cross-firm comparisons of different levels of family influence. To capture the multidimensional nature of family influence, this study uses structural equation modelling and measures the meditating effects of stewardship.

The results reveal a mediating effect of stewardship; family firms achieve better performance when they take advantage of and encourage stewardship attitudes among owners and leaders. Factors associated with stewardship behaviour, including stewardship motivation and stewardship culture, help explain why some family firms perform better than others.

When analysing the behaviour of family firms, interested entrepreneurs, managers and consultants should acknowledge that the family's influence entails both financial and emotional capital. The survival of the family businesses depends on balancing these aspects.

In response to calls for research into mediators of the complex relationship between family influence and firm outcomes, this study provides a novel explanation for performance-maximizing behaviours by organizations, in which pro-organizational attitudes coexist with self-serving motives.

The purpose of this paper is to develop a credit‐scoring model as an aggregate valuation procedure that integrates various financial and non‐financial factors and thereby improves small to medium‐sized enterprises' (SMEs) knowledge about their default risk.

Using panel data from a representative sample of Portuguese SMEs operating in the food or beverage manufacturing sector, this paper develops a logit scoring model to estimate one‐year predictions of default.

The probability of non‐default in the next year is an increasing function of profitability, liquidity, coverage, and activity and a decreasing function of leverage. Smaller firms and those with just one bank relationship have a higher probability of default. The findings suggest that a main bank has incentives to engage in hold up by increasing margins that ex post are too high.

Because SMEs differ from large corporations in their credit risk (e.g., riskier, lower asset correlations), this study has implications for both banks and supervisory actors. Banks should consider qualitative variables when setting internal systems and procedures to manage credit risk. Supervisory institutions should claim mixed credit ratings to determine regulatory capital requirements.

This paper offers a new model, focused specifically on SMEs, and explores the role of financial and non‐financial factors in determining internal credit risks.

The capital structure decision can be considered a difficult problem for academics as well as for managers. Corporate debt policy has been studied in the context of both large and small firms in developed countries, but comparatively less developed countries have received much less attention in the literature. This is particularly true in the case of medium income economies with an above average weight of financial intermediaries. This paper tests the factors affecting the capital structure decision of small firms in one such country. The pooled time series cross‐section regression estimates for 995 firms and four years, suggests variables such as taxes, bankruptcy costs, size, collateral, age and growth opportunities affect the capital structure decisions of small firms. These findings have significant implications, both at the firm level and for the support of policies that redefine the financial infrastructure that may foster the emergence of local entrepreneurs in these economies.

Combining ownership and management might lead concentrated shareholders, such as families, to wealth expropriation. The lack of external monitors and disciplinary agents potentially permits them to pursue this path. Thus, monitoring activity is one of the major drawbacks in family controlled firms. The purpose of this paper is to provide an integrated analysis of the governance roles of various block‐holders, institutional investors and corporate boards in firm performance in the context of publicly‐listed family‐controlled firms.

Using a multi‐industry data set of 208 firms listed on the Milan Stock Exchange (MSE), this study employs the generalized method of moments (GMM) to address the issue of endogeneity on panel data over the period 200‐2006.

The results show that family firms have better accounting performance than non‐family firms. So, active family involvement in management positions seems to reduce managerial opportunism. However, higher accounting performance does not translate into an increase in valuation levels, and thus might not accrue to minority shareholders. Additionally, the results also show an alignment incentive between a coalition of large shareholders (two families) and firm value.

This study provides empirical evidence consistent with a block‐holder coalition framework that sustains an incentive alignment effect of the coalition of large shareholders (two families) and the firm value. Additionally, the results also support evidence that board dominance is another channel through which families can extract private benefits.

This study contributes to understanding that the family firm performance depends on the efficiency of various governance mechanisms. Thus, it offers insights to policy makers to verify board appointment mechanisms used by family firms. Since external board members might be vetted and approved by the family or other dominant block‐holders, what is the extent of their independence from the dominant owners?

Most countries often have public companies with large controlling owners, typically a family. This empirical evidence aims to contrast with the classical view of the largest dispersed firm presented by Berle and Means and challenge the findings by Bhattacharya and Ravikumar, who predict that the shares held by families will decrease if an efficient financial market is put in place. Therefore, family firms represent an important group in the stock market today. Thus, the purpose of this paper is to analyze the effect of the family as a controlling owner on firms' performance, valuation and capital structure.

The paper reviews the current literature related to how family (taking into account specific governance characteristics such as family ownership, family control and family management) affects firms' performance and value.

The literature review showed that founder family control and professional (outside) management increase performance, whereas excess control via control enhancing mechanisms (such as dual class shares and pyramidal structures) and descendent management produce both lower valuation and performance. This evidence suggests that families have the incentives and the power to systematically expropriate wealth from minority shareholders.

Previous research shows that family firms on average perform better than non‐family firms. But this is a non‐linear relation due the fact that the relationship between family ownership and performance cannot be identified without distinguishing between control and cash‐flow rights. Thus, the literature review as a whole emphasizes that the incentives for the controlling shareholder to engage in expropriation are a function of the institutional framework in which the firm operates. So, for further research, it is important to investigate how family firms perform in different corporate governance systems. A policy implication is the necessity to improve minority shareholders' protection from the risk of expropriation by large shareholders.