Lines of Credit and Family Firms: The Case of an Emerging Market

Lines of credit constitute an integral part a firm’s liquidity policy; however, there is limited research on lines in emerging markets. This study fills this gap by examining firm incentives to access and draw from using the context Jordan, bank-based market, focusing impact family firms. To account for endogeneity control, estimates probability accessing line seemingly unrelated bivariate probit regression its usage treatment effect regression. The article documents that firms are less likely obtain their drawdowns smaller compared non-family These findings support agency’s view having credit. Other consistent with substitution between internal external sources which implies cost wedge two liquidity.