This study aims to examine the impact of family ownership and management on risk taking of Indian firms. We examine family firms’ approach to risk taking with respect to internationalization, tax aggressiveness, accounting aggressiveness, capital expenditure and R&D outlay and pledging of promoter shareholders’ shareholding. Family firms take essential risk on internationalization, indirect tax matters, accounting, capital and R&D expenditure and pledge of promoters shares but desist from being aggressive on direct tax matters which reflect their concern for reputation.

Based on a balanced panel of 1782 data points covering 297 firms, over the period 2013 to 2018, we examine family firms’ approach to risk taking on internationalization, tax aggressiveness, accounting aggressiveness, capital expenditure and R&D outlay and pledging of promoter shareholders’ shareholding. The results confirm that family firms perform better on internationalization, favour indirect tax aggressiveness but differentiate between indirect and direct tax aggressiveness, choose accounting policies that improve book profits and result in temporary book-tax differences, disregard short-term variation in macroeconomic factors in respect of capital investments and R&D outlay and are not against pledge of promoters shares.
Using the zero-inflated beta model we differentiate lack of dissent from positive assent in respect of pledge of shares. Status as family firm moderates impact of concentrated shareholding and adverse employee relations on internationalization and impact of group affiliation on internationalization and the pledge decision.