Family Ownership and Cash Holdings : Empirical Evidence from Norway

Abstract

This master thesis examines the level of cash holdings in Norwegian private firms in the period 2004 to 2014. We compare family firms to non-family firms and explore whether there are differences in their cash holding policies. Furthermore, we test whether inside versus outside management in family firms has an impact on cash holdings. Lastly, we look at the influence of founders in contrast to non-founders in family managed firms on cash holdings. We find that family firms hold significantly less cash than non-family firms. Moreover, we find that inside CEOs hold less cash than outside CEOs in family firms. Lastly, we find that founders hold slightly more cash than non-founders in family managed firms. Our findings contradict previous research. However, our research is based on private as opposed to public firms and might offer some new insight.