Impact of institutional environment on the capital structure of tunisian family firms

Abstract

The aim of the chapter is to analyse the effect of the institutional environment on the financing of Tunisian family firms. Two factors are considered. The first consists of the regulation of investments and the economic initiative. The second considers the level of corruption. This effect is highlighted using a sample of 41 listed and unlisted Tunisian family firms over the period 2007–2012. The results show that regulated sectors are negatively associated with debt access. This is further confirmed in the post- and prior revolution periods for family firms. The corruption index does not give significant results, although the negative coefficients demonstrate reluctance regarding debt. On the other hand, the ownership structure adopted by family CEOs and institutional investors improves debt. A possible explanation for the paradox is that the advantages taken from regulation substitute the debt requirement. In the other case, the relational advantage prevails.