Struktura kapitału i dywersyfikacja działalności spółek rodzinnych notowanych na GPW
Capital structure and diversification of family firms listed on the Warsaw Stock Exchange

Summary/Abstract: Literature on family firms financial management provides a thesis that founders of family firms − who usually do not hold well diversified portfolios − can use corporate diversification as a substitute for individual portfolio diversification. Such a view suggests that the main rationale for corporate diversification by family firms is risk mitigation. Our research does not support this view. We find no evidence for public family firms being more diversified that public non-family firms. However, we find a strict relation between corporate diversification and capital structure. Diversified family firms use more debt than singlesegment family firms. Moreover, in our sample among all diversified firms family firms use more debt than diversified non-family firms. Upon these results we propose a hypothesis that family firms use diversification to increase their debt capacity which eventually helps them simultaneously raise capital and remain control.

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