We investigate the impact of family firms on the cost of debt. We posit that, in order to understand whether family firms are related to a lower cost of debt financing, we must distinguish among three effects: ownership, control, and management. We find that the relationship of family firm's ownership and debt financing costs is inverted-U and family management is related, both statistically and economically, to a lower cost of debt financing. Our findings suggest that classic ownership-manager is more costly than the conflict between family and non-family shareholders on the cost of debt financing."
