Family firms, risk-taking and financial distress.

The authors investigate the question of which qualitative characteristics ar e likely to explain the survival of family firms in case of financial distress and whether these vari - ables improve the explanatory power of quantitative variables in clarifying the different probability of distress between family and non-family firms. They focus their atten - tion on the impact of the controlling owner and, using the Socioemotional We alth theory (SEW), study the role of the family involvement in mitigating or accentuat ing the likelihood of distress. Using a dataset of 1,137 Italian family and non-family firms during 2004–2013, the authors found that family firms are significantly less likely to incur distress than non-family firms. The board dimension and the number of family members on board affect the probability of distress even controlling for some firm risk characteristics such as beta and ROA volatility, and there is also evidence of a gender mitigating effect in case of a female CEO