Cash holdings and economic performance: the role of socioemotional wealth in distinguishing between family and non-family firms
DOI:
https://doi.org/10.17524/repec.v20.e3858Palavras-chave:
Retenção de caixa, Retorno sobre ativos (ROA), Empresas familiares, Riqueza Sociemocional, Controle e Influência FamiliarResumo
Objective: This study analyzes the relationship between cash holdings and firm performance (ROA), comparing family and non-family firms from the perspective of Socioemotional Wealth (SEW), with a focus on the distinct effects of extended SEW in family firms. It also assesses the moderating roles of the “family control and influence” (FCI) dimension and high indebtedness.
Method: The analysis adopts a mixed-gamble framework, conceptualizing cash holding decisions as trade-offs between potential gains and losses, and uses regression models with non-linear specifications over the 2010–2019 period. The sample comprises 183 firms listed on B3, classified as family and non-family firms.
Results: The findings indicate a positive linear relationship between cash holdings and performance in family firms, whereas a non-linear inverted U-shaped relationship is observed in both the full sample and non-family firms. Additionally, higher levels of FCI strengthen the positive effects of cash holdings on performance in family firms, consistent with the view that FCI promotes greater alignment between financial and socioemotional objectives. High indebtedness, on the other hand, did not show statistical significance in the investigated relationship.
Practical and Social Implications: The findings suggest that family involvement in top-level governance can function as an effective mechanism in financial decision- making, contributing to improved firm performance. This effect appears to be stronger in contexts characterized by high levels of FCI, where closer alignment between financial and socioemotional objectives enhances the benefits of cash holdings in family firms.
Tradução
Este artigo é uma tradução em English do artigo:
Retenção de caixa e desempenho econômico: o papel da riqueza socioemocional na distinção entre empresas familiares e não familiares
Referências
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Baños-Caballero, S., García-Teruel, P. J., & Martínez-Solano, P. (2014). Working capital management, corporate performance, and financial constraints. Journal of Business Research, 67(3), 332–338. https://doi.org/10.1016/j.jbusres.2013.01.016
Bates, T. W., Kahle, K. M., & Stulz, R. M. (2009). Why do U.S. firms hold so much more cash than they used to? Journal of Finance, 64(5), 1985–2021. https://doi.org/10.1111/j.1540-6261.2009.01492.x
Berrone, P., Cruz, C., & Gómez-Mejía, L. R. (2012). Socioemotional Wealth in Family Firms: Theoretical Dimensions, Assessment Approaches, and Agenda for Future Research. Family Business Review, 25(3), 258–279. https://doi.org/10.1177/0894486511435355
Calabrò, A., Minichilli, A., Amore, M. D., & Brogi, M. (2018). The courage to choose! Primogeniture and leadership succession in family firms. Strategic Management Journal, 39(7), 2014–2035. https://doi.org/10.1002/smj.2760
Cambrea, D. R., Ponomareva, Y., Pittino, D., & Minichilli, A. (2022). Strings attached: Socioemotional wealth mixed gambles in the cash management choices of family firms. Journal of Family Business Strategy, 13(3), 100466. https://doi.org/10.1016/j.jfbs.2021.100466
Cennamo, C., Berrone, P., Cruz, C., & Gómez-Mejía, L. R. (2012). Socioemotional Wealth and Proactive Stakeholder Engagement: Why Family-Controlled Firms Care More About Their Stakeholders. Entrepreneurship: Theory and Practice, 36(6), 1153–1173. https://doi.org/10.1111/j.1540-6520.2012.00543.x
Chrisman, J. J., Chua, J. H., & Sharma, P. (2005). Trends and directions in the development of a strategic management theory of the family firm. Entrepreneurship: Theory and Practice, 29(5), 555–576. https://doi.org/10.1111/j.1540-6520.2005.00098.x
Dyer, W. G., & Whetten, D. A. (2006). Family Firms and Social Responsibility: Preliminary Evidence from the S&P 500. Entrepreneurship Theory and Practice, 30(6), 785-802. https://doi.org/10.1111/j.1540-6520.2006.00151.x
Faulkender, M., & Wang, R. (2006). Corporate financial policy and the value of cash. Journal of Finance, 61(4), 1957–1990. https://doi.org/10.1016/j.jfineco.2011.10.013
Fresard, L. (2010). Financial strength and product market behavior: The real effects of corporate cash holdings. Journal of Finance, 65(3), 1097–1122. https://doi.org/10.1016/j.jfineco.2011.10.013
Garvey, G. T. (1992). Leveraging the Underinvestment Problem: How High Debt and Management Shareholdings Solve the Agency Costs of Free Cash Flow. Journal of Financial Research, 15(2), 149–166. https://doi.org/10.1111/j.1475-6803.1992.tb00795.x
Gómez-Mejía, L. R., Campbell, J. T., Martin, G., Hoskisson, R. E., Makri, M., & Sirmon, D. G. (2014). Socioemotional Wealth as a Mixed Gamble: Revisiting Family Firm R&D Investments With the Behavioral Agency Model. Entrepreneurship: Theory and Practice, 38(6), 1351–1374. https://doi.org/10.1111/etap.12083
Gómez-Mejía, L. R., Haynes, K. T., Núñez-Nickel, M., Jacobson, K. J. L., & Moyano-Fuentes, J. (2007). Socioemotional wealth and business risks in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52(1), 106–137. https://doi.org/10.2189/asqu.52.1.106
Gómez-Mejía, L. R., Patel, P. C., & Zellweger, T. M. (2018). In the Horns of the Dilemma: Socioemotional Wealth, Financial Wealth, and Acquisitions in Family Firms. Journal of Management, 44(4), 1369–1397.
Harford, J. (1999). Corporate cash reserves and acquisitions. Journal of Finance, 54(6), 1969–1997. https://doi.org/10.1111/0022-1082.00179
Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance, and takeovers. Corporate Bankruptcy, 76(2), 11–16.
Jiang, D. S., Kellermanns, F. W., Munyon, T. P., & Morris, M. L. (2018). More Than Meets the Eye: A Review and Future Directions for the Social Psychology of Socioemotional Wealth. Family Business Review, 31(1), 125–157. https://doi.org/10.1177/0894486517736959
Kim, C., & Bettis, R. A. (2014). Cash is surprisingly valuable as a strategic asset. Strategic Management Journal, 35(13), 2053–2063. https://doi.org/10.1002/smj.2205
La Rocca, M., & Cambrea, D. R. (2019). The effect of cash holdings on firm performance in large Italian companies. Journal of International Financial Management and Accounting, 30(1), 30–59. https://doi.org/10.1111/jifm.12090
Lind, J. T., & Mehlum, H. (2010). With or without u? the appropriate test for a U-shaped relationship. Oxford Bulletin of Economics and Statistics, 72(1), 109–118. https://doi.org/10.1111/jifm.12090
Loncan, T. R., & Caldeira, J. F. (2014). Estrutura de capital, liquidez de caixa e valor da empresa: estudo de empresas brasileiras cotadas em bolsa. Revista Contabilidade & Finanças, 25(64), 46–59. https://doi.org/10.1111/jifm.12090
López-Gracia, J., & Sánchez-Andújar, S. (2007). Financial structure of the family business: Evidence from a group of small Spanish firms. Family Business Review, 20(4), 269–287. https://doi.org/10.1111/j.1741-6248.2007.00094.x
Lozano, M. B. (2015). Strategic decisions of family firms on cash accumulation. RAE Revista de Administração de Empresas, 55(4), 461–466. https://doi.org/10.1590/S0034-759020150409
Martínez-Sola, C., García-Teruel, P. J., & Martínez-Solano, P. (2018). Cash holdings in SMEs: speed of adjustment, growth and financing. Small Business Economics, 51(4), 823–842. https://doi.org/10.1007/s11187-018-9990-y
Miller, D., & Le Breton-Miller, I. (2014). Deconstructing socioemotional wealth. Entrepreneurship: Theory and Practice, 38(4), 713–720. https://doi.org/10.1111/etap.12111
Miller, D., Le Breton-Miller, I., & Lester, R. H. (2011). Family and Lone Founder Ownership and Strategic Behaviour: Social Context, Identity, and Institutional Logics. Journal of Management Studies, 48(1), 1–25. https://doi.org/10.1111/j.1467-6486.2009.00896.x
Minichilli, A., Brogi, M., & Calabrò, A. (2016). Weathering the Storm: Family Ownership, Governance, and Performance Through the Financial and Economic Crisis. Corporate Governance: An International Review, 24(6), 552–568. https://doi.org/10.1111/corg.12125
Nason, R. S., & Patel, P. C. (2016). Is cash king? Market performance and cash during a recession. Journal of Business Research, 69(10), 4242–4248. https://doi.org/10.1016/j.jfbs.2019.04.002
Nguyen, T. L. H., Nguyen, L. N. T., & Le, T. P. V. (2016). Firm Value, Corporate Cash Holdings and Financial Constraint: A Study from a Developing Market. Australian Economic Papers, 55(4), 368–385. https://doi.org/10.1111/1467-8454.12082
Opler, T., Pinkowitz, L., Stulz, R., & Williamson, R. (1999). The determinants and implications of corporate cash holdings. In Journal of Financial Economics (52(1), 3–46. https://doi.org/10.1016/s0304-405x(99)00003-3
Ozkan, A., & Ozkan, N. (2004). Corporate cash holdings: An empirical investigation of UK companies. Journal of Banking and Finance, 28(9), 2103–2134. https://doi.org/10.1016/j.jbankfin.2003.08.003
Prencipe, A., Bar-Yosef, S., Mazzola, P., & Pozza, L. (2011). Income smoothing in family-controlled companies: Evidence from Italy. Corporate Governance: An International Review, 19(6), 529–546. https://doi.org/10.1111/j.1467-8683.2011.00856.x
Schulze, W. S., Lubatkin, M. H., Dino, R. N., & Buchholtz, A. K. (2001). Agency Relationships in Family Firms: Theory and Evidence. Organization Science, 12(2), 99–116. https://doi.org/10.1287/orsc.12.2.99.10114
Shleifer, A., & Vishny, R. W. (1989). Management Entrenchment: The Case of Manager-Specific Investments. Journal of Financial Economics, 25, 123–139. https://doi.org/10.1016/0304-405X(89)90099-8
Zellweger, T. M., & Astrachan, J. H. (2008). On the emotional value of owning a firm. Family Business Review, 21(4), 347–363. https://doi.org/10.1177/08944865080210040106
Zellweger, T. M., Kellermanns, F. W., Chrisman, J. J., & Chua, J. H. (2012). Family control and family firm valuation by family CEOs: The importance of intentions for transgenerational control. Organization Science, 23(3), 851–868. https://doi.org/10.1287/orsc.1110.0665
Baños-Caballero, S., García-Teruel, P. J., & Martínez-Solano, P. (2014). Working capital management, corporate performance, and financial constraints. Journal of Business Research, 67(3), 332–338. https://doi.org/10.1016/j.jbusres.2013.01.016
Bates, T. W., Kahle, K. M., & Stulz, R. M. (2009). Why do U.S. firms hold so much more cash than they used to? Journal of Finance, 64(5), 1985–2021. https://doi.org/10.1111/j.1540-6261.2009.01492.x
Berrone, P., Cruz, C., & Gómez-Mejía, L. R. (2012). Socioemotional Wealth in Family Firms: Theoretical Dimensions, Assessment Approaches, and Agenda for Future Research. Family Business Review, 25(3), 258–279. https://doi.org/10.1177/0894486511435355
Calabrò, A., Minichilli, A., Amore, M. D., & Brogi, M. (2018). The courage to choose! Primogeniture and leadership succession in family firms. Strategic Management Journal, 39(7), 2014–2035. https://doi.org/10.1002/smj.2760
Cambrea, D. R., Ponomareva, Y., Pittino, D., & Minichilli, A. (2022). Strings attached: Socioemotional wealth mixed gambles in the cash management choices of family firms. Journal of Family Business Strategy, 13(3), 100466. https://doi.org/10.1016/j.jfbs.2021.100466
Cennamo, C., Berrone, P., Cruz, C., & Gómez-Mejía, L. R. (2012). Socioemotional Wealth and Proactive Stakeholder Engagement: Why Family-Controlled Firms Care More About Their Stakeholders. Entrepreneurship: Theory and Practice, 36(6), 1153–1173. https://doi.org/10.1111/j.1540-6520.2012.00543.x
Chrisman, J. J., Chua, J. H., & Sharma, P. (2005). Trends and directions in the development of a strategic management theory of the family firm. Entrepreneurship: Theory and Practice, 29(5), 555–576. https://doi.org/10.1111/j.1540-6520.2005.00098.x
Dyer, W. G., & Whetten, D. A. (2006). Family Firms and Social Responsibility: Preliminary Evidence from the S&P 500. Entrepreneurship Theory and Practice, 30(6), 785-802. https://doi.org/10.1111/j.1540-6520.2006.00151.x
Faulkender, M., & Wang, R. (2006). Corporate financial policy and the value of cash. Journal of Finance, 61(4), 1957–1990. https://doi.org/10.1016/j.jfineco.2011.10.013
Fresard, L. (2010). Financial strength and product market behavior: The real effects of corporate cash holdings. Journal of Finance, 65(3), 1097–1122. https://doi.org/10.1016/j.jfineco.2011.10.013
Garvey, G. T. (1992). Leveraging the Underinvestment Problem: How High Debt and Management Shareholdings Solve the Agency Costs of Free Cash Flow. Journal of Financial Research, 15(2), 149–166. https://doi.org/10.1111/j.1475-6803.1992.tb00795.x
Gómez-Mejía, L. R., Campbell, J. T., Martin, G., Hoskisson, R. E., Makri, M., & Sirmon, D. G. (2014). Socioemotional Wealth as a Mixed Gamble: Revisiting Family Firm R&D Investments With the Behavioral Agency Model. Entrepreneurship: Theory and Practice, 38(6), 1351–1374. https://doi.org/10.1111/etap.12083
Gómez-Mejía, L. R., Haynes, K. T., Núñez-Nickel, M., Jacobson, K. J. L., & Moyano-Fuentes, J. (2007). Socioemotional wealth and business risks in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52(1), 106–137. https://doi.org/10.2189/asqu.52.1.106
Gómez-Mejía, L. R., Patel, P. C., & Zellweger, T. M. (2018). In the Horns of the Dilemma: Socioemotional Wealth, Financial Wealth, and Acquisitions in Family Firms. Journal of Management, 44(4), 1369–1397.
Harford, J. (1999). Corporate cash reserves and acquisitions. Journal of Finance, 54(6), 1969–1997. https://doi.org/10.1111/0022-1082.00179
Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance, and takeovers. Corporate Bankruptcy, 76(2), 11–16.
Jiang, D. S., Kellermanns, F. W., Munyon, T. P., & Morris, M. L. (2018). More Than Meets the Eye: A Review and Future Directions for the Social Psychology of Socioemotional Wealth. Family Business Review, 31(1), 125–157. https://doi.org/10.1177/0894486517736959
Kim, C., & Bettis, R. A. (2014). Cash is surprisingly valuable as a strategic asset. Strategic Management Journal, 35(13), 2053–2063. https://doi.org/10.1002/smj.2205
La Rocca, M., & Cambrea, D. R. (2019). The effect of cash holdings on firm performance in large Italian companies. Journal of International Financial Management and Accounting, 30(1), 30–59. https://doi.org/10.1111/jifm.12090
Lind, J. T., & Mehlum, H. (2010). With or without u? the appropriate test for a U-shaped relationship. Oxford Bulletin of Economics and Statistics, 72(1), 109–118. https://doi.org/10.1111/jifm.12090
Loncan, T. R., & Caldeira, J. F. (2014). Estrutura de capital, liquidez de caixa e valor da empresa: estudo de empresas brasileiras cotadas em bolsa. Revista Contabilidade & Finanças, 25(64), 46–59. https://doi.org/10.1111/jifm.12090
López-Gracia, J., & Sánchez-Andújar, S. (2007). Financial structure of the family business: Evidence from a group of small Spanish firms. Family Business Review, 20(4), 269–287. https://doi.org/10.1111/j.1741-6248.2007.00094.x
Lozano, M. B. (2015). Strategic decisions of family firms on cash accumulation. RAE Revista de Administração de Empresas, 55(4), 461–466. https://doi.org/10.1590/S0034-759020150409
Martínez-Sola, C., García-Teruel, P. J., & Martínez-Solano, P. (2018). Cash holdings in SMEs: speed of adjustment, growth and financing. Small Business Economics, 51(4), 823–842. https://doi.org/10.1007/s11187-018-9990-y
Miller, D., & Le Breton-Miller, I. (2014). Deconstructing socioemotional wealth. Entrepreneurship: Theory and Practice, 38(4), 713–720. https://doi.org/10.1111/etap.12111
Miller, D., Le Breton-Miller, I., & Lester, R. H. (2011). Family and Lone Founder Ownership and Strategic Behaviour: Social Context, Identity, and Institutional Logics. Journal of Management Studies, 48(1), 1–25. https://doi.org/10.1111/j.1467-6486.2009.00896.x
Minichilli, A., Brogi, M., & Calabrò, A. (2016). Weathering the Storm: Family Ownership, Governance, and Performance Through the Financial and Economic Crisis. Corporate Governance: An International Review, 24(6), 552–568. https://doi.org/10.1111/corg.12125
Nason, R. S., & Patel, P. C. (2016). Is cash king? Market performance and cash during a recession. Journal of Business Research, 69(10), 4242–4248. https://doi.org/10.1016/j.jfbs.2019.04.002
Nguyen, T. L. H., Nguyen, L. N. T., & Le, T. P. V. (2016). Firm Value, Corporate Cash Holdings and Financial Constraint: A Study from a Developing Market. Australian Economic Papers, 55(4), 368–385. https://doi.org/10.1111/1467-8454.12082
Opler, T., Pinkowitz, L., Stulz, R., & Williamson, R. (1999). The determinants and implications of corporate cash holdings. In Journal of Financial Economics (52(1), 3–46. https://doi.org/10.1016/s0304-405x(99)00003-3
Ozkan, A., & Ozkan, N. (2004). Corporate cash holdings: An empirical investigation of UK companies. Journal of Banking and Finance, 28(9), 2103–2134. https://doi.org/10.1016/j.jbankfin.2003.08.003
Prencipe, A., Bar-Yosef, S., Mazzola, P., & Pozza, L. (2011). Income smoothing in family-controlled companies: Evidence from Italy. Corporate Governance: An International Review, 19(6), 529–546. https://doi.org/10.1111/j.1467-8683.2011.00856.x
Schulze, W. S., Lubatkin, M. H., Dino, R. N., & Buchholtz, A. K. (2001). Agency Relationships in Family Firms: Theory and Evidence. Organization Science, 12(2), 99–116. https://doi.org/10.1287/orsc.12.2.99.10114
Shleifer, A., & Vishny, R. W. (1989). Management Entrenchment: The Case of Manager-Specific Investments. Journal of Financial Economics, 25, 123–139. https://doi.org/10.1016/0304-405X(89)90099-8
Zellweger, T. M., & Astrachan, J. H. (2008). On the emotional value of owning a firm. Family Business Review, 21(4), 347–363. https://doi.org/10.1177/08944865080210040106
Zellweger, T. M., Kellermanns, F. W., Chrisman, J. J., & Chua, J. H. (2012). Family control and family firm valuation by family CEOs: The importance of intentions for transgenerational control. Organization Science, 23(3), 851–868. https://doi.org/10.1287/orsc.1110.0665
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27-05-2026
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Barros, M. G., & Silva, C. A. T. (2026). Cash holdings and economic performance: the role of socioemotional wealth in distinguishing between family and non-family firms. Revista De Educação E Pesquisa Em Contabilidade (REPeC), 20. https://doi.org/10.17524/repec.v20.e3858
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Copyright (c) 2026 Manuela Gonçalves Barros, César Augusto Tibúrcio Silva
Este trabalho está licenciado sob uma licença Creative Commons Attribution 4.0 International License.
