Measuring credit risk in family firms

Artikel

This article attempts to identify the default risk measure which best reflects the idiosyncratic context of public family firms. Seven accounting- and market-based measures are compared over a sample of 981 US family and non-family firms for the period 2000-2016. The results show that the Black-Scholes-Merton (BSM) measure gives the best fit in both types of firm. However, all the accounting-based measures, especially Altman's Z-score, come closest to the market-based measures when used to assess the credit risk of family firms. The two types of measures also coincide more closely in their default risk orderings of family than of non-family firms. Useful practical implications can be drawn from these findings, which show that accounting-based measures can be used reliably in the absence of market data for family firms with similar characteristics to those in our sample.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: BRQ Business Research Quarterly ; ISSN: 2340-9436 ; Volume: 25 ; Year: 2022 ; Issue: 3 ; Pages: 265-282 ; London: Sage Publishing

Classification and Topics

• Classification: Management ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Bankruptcy; Liquidation ; Contingent Pricing; Futures Pricing; option pricing ; Model Evaluation, Validation, and Selection ; Business Economics ; Accounting
• Subject: Black-Scholes-Merton measure ; default risk ranking of firms ; family firms ; Goodness of fit of credit risk

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Abinzano, Isabel ; Corredor, Pilar ; Martinez, Beatriz
• Event: Veröffentlichung
• (who): Sage Publishing
• (where): London
• (when): 2022

Further information

• DOI: doi:10.1177/2340944420941857
• Handle: http://hdl.handle.net/10419/261927
• Last update: 10.03.2025, 11:42 AM CET