Measuring the impact of financial cycles on family firms: how to prepare for crisis?

Financial cycles have sizeable economic effects, as witnessed during the 2008 financial crisis. However, despite topic’s research importance, there is limited literature on how and crises affect individual family firms. To best of our knowledge, study among first to measure impact firms, we use Amadeus database European companies. We identify firms following Global Family Business Index methodology 2019 (EY Center for University St. Gallen). cycles, credit-to-GDP gap indicator from Bank International Settlements. Using a proxy panel structural vector autoregression (Abrigo Love 2016), Wald tests Granger causality (Granger 1969), impulse response functions (Lütkepohl 2010; Lütkepohl et al. 2015). prove that are less vulnerable than non-family both booms busts. perform better when cycle shocks pronounced firms’ performance. Non-family highly performing worse The adoption firm management governance policies should improve performance help economy recover rapidly in times crisis (exogenous shocks). Our explore micro level with focus results could managers practitioners form their business policy by looking at experiences. Targeting more towards good bad will allow policymakers prepare future crises.