Family involvement and debt financing behavior in private SMEs: A socioemotional wealth perspective

Grounded in the socioemotional wealth (SEW) perspective, this study examines how family ownership and management relate to debt financing decisions in private small and medium-sized enterprises (SMEs), while also assessing the role of generational stage. Using data from a sample of 200 Moroccan SMEs over the period 2018–2022, the findings show that family SMEs adopt more conservative financing policies and maintain significantly lower debt levels than their non-family counterparts, consistent with greater risk aversion and a stronger desire to preserve family control over the firm. The analysis provides no statistically significant evidence that debt financing differs across family firms according to management involvement or generational stage, as proxied by firm age. These findings contribute to the literature on family firms’ capital structure and advance evidence from an emerging economy, while providing valuable and actionable insights for family SME managers, lenders, and policymakers.