Financing from Family and Friends

• 成果类型: Article
• 署名作者: Lee, Samuel; Persson, Petra
• 署名单位: Santa Clara University; European Corporate Governance Institute; Swedish House of Finance; Stanford University; National Bureau of Economic Research; Center for Economic & Policy Research (CEPR); Research Institute of Industrial Economics (IFN)
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhw031
• 发表日期: 2016
• 页码: 2341
• 关键词: economics; BUSINESS; incentives; EVOLUTION; GENDER; IMPACT; MODEL

摘要

Most informal finance comes from family and friends. Existing informal finance theories cannot match two characteristics of family finance: family investors may accept below-market or even negative returns, yet borrowers often prefer formal finance. We argue that social preferences make family finance cheap but create shadow costs that nonetheless discourage its use: Committing family funds to risky investment displaces intrafamily insurance and undermines limited liability. The same characteristics that sustain familial insurance thus render family finance a poor source of risk capital. Even when overcoming capital constraints requires social ties, intermediation and semiformalization may therefore be crucial for promoting risk taking.