The economic world is dominated by companies controlled and managed by families from Europe, the United States or Asia, for [1-3]. However, for a long time, despite their economic weight, management research has relatively ignored this type of organization. Family businesses were a stage, and therefore inevitably temporary, in the development of these firms that, one day or another, had to transform themselves by dispersing their shareholding, and entrusting their management to professional and non-family managers. Suffering from an often negative image, family businesses rhymed with paternalistic, rigid, old-fashioned, cautious, old-fashioned, showing inertia. These characteristics represent as many sources of competitive disadvantages. In a few years, this vision has changed radically. They have become cautious, economical, resilient, praised for their patience, their long-term vision, their dynamism, their better management and benefiting from multiple competitive advantages. This representation is further strengthened, with the global crisis that they know today and which is attributed to the mismanagement of professional managers more interested in short-term profits and their remuneration than by the development of an entrepreneurial project. Faced with this comeback, the role of management research on family firms and their virtues is all the more important. It is a question of not engaging in false preconceived ideas, superficial analyzes or a premature or irrational craze. The development of research for a decade, should allow us to avoid these pitfalls. Unfortunately, the work done on family businesses does not yet provide a precise and definitive image of the specificities, advantages or disadvantages of these. Based on the literature review, we find that family businesses enjoy a higher sustainability than other forms of business. As a result, family businesses are therefore more resilient to crises and different economic cycles. According to a survey conducted in June 2012 by Ernest and Young in collaboration with the Family Business Network, family businesses are more resilient to the crisis and their functioning. In addition, the interest in the family business is justified to represent the most important part of the global economy. In other words, it is the most responsive structure in the world. It represents a perspective of economic growth, unique and sustainable [4]. They represent, according to the countries, 70 to 90% of the companies’ active in the economy. Family businesses are one of the pillars of the global economy, both because of their economic weights and because of their persistence over the centuries. Long decried by the apostles of economic liberalism and by the defenders of the managerial firm, they represented in the collective imagination an obsolete form of organization in which authoritarianism and amateurism were supposed to be the rule. And yet, they still remain the first form of productive organization in many countries, especially since the institutional framework of the state does not offer sufficient protection of property rights and the family and its relationship network offers an alternative that minimizes risks and transaction costs. Explain that the "puzzle of capital structure (choosing the firm for an optimal capital structure) remains one of the major unresolved issues in the financial economics literature. Much research has been conducted in trying to explain the theory of capital structure from different points of view since 1958. Considered the fathers of the theory of capital structure, were the first to present a theorem explaining the company's decision to raise capital [5]. Ampenberger have argued that the literature and empirical findings on the financing theory and capital structure of family-owned businesses are short and inconclusive. Due to numerous financial scandals that have been associated with the agency's problem, companies have adopted a wide range of governance mechanisms to mitigate its impact and financial costs [6]. Debt financing through all its process and oversight requirements has been found to be one of the main governance mechanisms and therefore had an impact on business decisions. Below, the main theories of literature will discuss that suggest the relationship between the family business and the level of debt. Employ a stratified random sample of 200 US public firms in the S&P Small-Cap 600 index during the period from 1999 to 2007, to examine the impact of family ownership on market value and book value debt ratios and the moderating effects of family control and equity performance after controlling for firm, industry, and macroeconomic variables [7]. They find that the initial panel regression suggests that family ownership is not associated to debt ratios. But, additional assessment with controls for family CEO and equity performance demonstrates that family ownership is positively and significantly correlated to market and book value debt ratios, but its impact is offset by family control through the CEO position and equity performance. All the research work devoted to the succession of family SMEs takes as a necessary starting point, even if not enough, the manifestation of the agreement of the wills of the two parties, thus forming part of a family functioning scheme in which individualistic values are the norm. however, and it is the observation from the ground that is at the origin of this work in Morocco, a country in which a family system dominates different from that of Western societies and where this agreement of wills does not exist. Moroccan family businesses in general are experiencing a transmission deficit because the identification of the good buyer remains difficult. The psychological side intervenes regularly because the transferor always looks for someone who looks like him to transmit his company. When a family member takes over or inherits this management from the family business (which is often unprepared), it is even more difficult to reconcile the staff and the professional. This complexity comes from the emotional commitment of the two loved ones. However, according to the observation during the missions that we have in the family businesses, this emotional bond is also an engine for the members of the family to strengthen their patrimony and their company. This leads me to say that working with a family member or family promises some difficulties and requires great maturity. It is important to consider all cases of personal or professional disagreement or conflict from the start. This being the case, the willingness to carry the project or the common family values can be a real driver leading to success. Most Moroccan family businesses opt for the legal status of limited liability company (LLC). This one allows them to have a more accessible and simple control. The shares in this type of business are inherited according to the laws in force in Morocco or by open assignment between family members. The optimized governance of the family business is therefore characterized by the fact that it comprises two levels. Firstly, family governance, which includes the creation of bodies such as the Family Council, where family members who are not shareholders and who are not involved in the company are also present. Secondly, the governance of the company, which includes the traditional decision-making and control bodies: General Meeting, Board of Directors or Supervisory Board, Management Board and Management Committees. Moroccan family businesses face two main types of problems. The first is at the level of choice between different sources of financing namely: self-financing, debt and capital increase. The second lies in choosing the best combination of equity and debt. The financing methods of Moroccan family businesses have undergone a profound change. In addition to traditional instruments to provide credit or strengthen the capital of companies, several new and original instruments have made their appearance in most developing countries. Faced with this situation, companies are seeking to determine the best financing strategy by creating economic value added. This research examines empirically the nexus among financing as capital structure and economic value added by using correlation and regression analysis. The sample used is composed by 9 Moroccan family firms during the period from 2005 to 2016. The empirical findings show that there isn’t significant correlation between external financing and EVA performance scales. This finding confirm the importance of internal financing in the family business which prefer low leverage because it reduces the risk of bankruptcy and protects their under-diversified human capital [8]. The rest of this paper is organized as follows: in section 2, we develop a related literature review. Section 3 presents research hypotheses. Section 4 describes data. The econometric methodology is explained in section 5. Section 6 presents the main empirical results and analysis. Section 7 highlights the major conclusions of the different part of the present paper.

Argue that generally in family-owned businesses, major shareholders use excess control rights to weaken the capacity of internal control mechanisms that may arise through additional equity holders and the presence of family independent member’s representatives on the board of directors, binding their rooting and expropriation activity. When there is a significant separation between ownership and control within family businesses, and, as a result, the possibility of wealth extraction in mind, the higher debt level could be an effective mechanism for maintain control and expropriation of minority shareholders [9]. The main challenge for family businesses is to promote growth without jeopardizing the sustainability of family control. Nevertheless, the notion of family control is not uniform: family control can take various forms, from the point of view of its objective modalities (structure of capital, distribution of voting rights, stock exchange listing, composition of the council of administration and the management team) than the actual degree of influence of the family [10]. Also, beyond the perpetuation of the family nature of firms, it is more generally the terms and conditions of exercise of family control that can be influenced by the financial situation. In fact, the evolution of the modalities of family control is closely linked to the question of the financing of activities and the growth of businesses. If the financial flows generated do not completely self-finance the growth policy, external financing choices can have repercussions on the degree of independence of family businesses. These repercussions are conceivable in the case of debt financing, but especially when the company is required to open its capital to non-family investors, particularly in the context of an IPO. The opening of the capital and the listing on the stock market can thus reflect growth opportunities but at the same time a low possibility of recourse to alternative modes of financing [11]. In the latter case, tensions may result from the fact that the resource allocation function of financial markets also affects the allocation of decision-making powers. For example, observe in the United Kingdom that family shareholders are reluctant to open up their capital, preferring to avoid any form of external control even if this means limiting growth prospects [12]. Published research also concludes that there are significant differences between the financial policies of family businesses and those of non-family businesses. In particular, if we look at all of this research, family businesses are characterized by a lower reliance on debt [13-16]. Two factors contribute to explain this tangentially more cautious financial policy. First, the priority is given to the principle goals of sustainability of the firm activities and family controls, which is particularly driven by the desire to pass on the firm to future generations. The family business, in the representation of its family shareholders, is an asset to pass on to future generations, which can encourage the implementation of an optimal investment policy in the long term but also induce a strong aversion to strategic and financial decisions that carry risk. Second, less diversification of the asset portfolios held by shareholders in the firm. The company often constitutes a preponderant part of the family patrimony. This less diversification of the asset portfolio, independently of the emotional link that can link them to the company, is correlative to a lesser diversification of the financial risks incurred by the shareholders. In addition, in the case of active participation in the management of the company, the financial risk is accompanied by a risk of depreciation of the reputational capital and the human capital of the family leaders, the latter risk being also reinforced by the complementarity between the assets of the company and the specific human capital of its managers. The reality of the family shareholder thus deviates most often from the representation resulting from the financial theory of a shareholder managing a portfolio of diversified securities. The family shareholder does not seek solely to maximize the expected profitability in the mathematical sense of the term of its securities. It also seeks to guard against the risk of a substantial reduction of its assets. These two distinguishing characteristics of family shareholders, the priority given to sustainability objectives and the lesser diversification of the asset portfolio, lead to a greater reluctance towards debt. Indeed, debt increases the financial risk while the latter is positively correlated with the risk of bankruptcy and the risk of loss of control [17-18]. Liquidity ratios are also indicative variables of the level of these different types of risk. Find that the reluctance of family businesses to debt is all the stronger when it comes to short-term debts [19]. The latter, according to the authors, are indeed those that are most strongly associated with the risk of loss of control. Argue that family business managers prefer low leverage because it reduces the risk of bankruptcy and protects their under-diversified human capital [20]. Owners of family businesses are well aware that, by increasing debt, the financial risk will be significantly increased which will increase the volatility of their businesses, especially in difficult times. Other results founded by revealed that family firmes utilize lower amounts of leverage evaluated with non-family firms. Obstinately, other results concluded that family businesses are moderately more leveraged than their non-family counterparts [20-22]. In the same context, identified family organization as major factor of lower leverage ratios, concluded that active family organization augments leverage. Other works show preservation of control and impact, growth opportunities, and risk-aversion as explaining determinants. In addition, limited financing options, the level of creditor monitoring, and the amount of internal resources are influencing determinants as well [23-24]. In general, the empirical results of showed confirmation that credit markets are interested in providing more long-term debt to family businesses, as they recognize these borrowers as low risky [25-27].

Considering that in the present study to evaluate economic performance, economic value added (EVA) has been so original and secondary research hypotheses are expressed as follows. In addition, the capital structure of family-owned firms looks at conventional finance theories, the market timing hypothesis, the optimal debt ratio theory, and the hierarchical financing theory. The main hypotheses in our paper are:

H1: There is a significant relationship between external financing and economic value added. H2: There is no significant relationship between external financing and economic value added.

Data

This paper studies the relationship between the two variables, the performance and external financing by using correlation coefficients. In correlation research the main purpose is to investigate whether relationship between two or more variables are quantitative (measurable) and if there is enough and how much is it. The degree of relation between two variables, usually expressed as a correlation coefficient is a number between negative one and positive one. The two variables are interdependent coefficient close to zero and two variables that are strongly linked with a coefficient close to one or a negative one. In this study, to test the research hypotheses, statistical techniques such as correlation coefficient and the coefficient of determination or explanation and estimate regression models with panel data are used. The population in this study is composed by nine Moroccan family firms which are:

• The accepted companies in the data must be in the form of production and investment firms and intermediaries are not public.
• Financial and annual reports can be ended at the end of the financial year, a consistent period of time.
• Family firms should have needed financial data needed to calculate the independent variables (net external financing) and dependent (performance criteria) according to the methodology.
• Because some of the parameters are necessary to determine the market value of equity, therefore, the company's shares must be traded at least once during March each year.

In Table 1, we present the above statistical community related to the 9 family firms used in our paper during the period from 2005 to 2016. The number of firm selected in our study is based on reasons; (i) the presence of information for the family business in the case of Moroccan context, (ii) the number of family business in Moroccan is not defined by the government and (iii) the family business in Moroccan don’t distribute any information.

The variables used in our study included two types; explicative variables and dependent variable. Then, these variables are used to examine empirically the link among financing as capital structure and economic value added by using correlation and regression analysis. We use the correlation matrix and linear regression to analyze this link.

The explicative variable

The explicative variable in this study is a net external financing. To assess the external financing of the two approaches can be used for one approach, a balance sheet and cash flow statements of the other approaches. The approach to the balance sheet, net financial debt is defined as the sum of changes in equity. Therefore, the effectiveness of each source of financing of the company's operating performance compared with other sources of financing.

 (1)

(Changes in capital + Changes in debt = Changes in financing)

   (2)

(Changes in preferred stock of capital + Changes in common stock of capital = Changes in capital)

  (3)

(Changes to documents + Convertible debt (in stock) + Long-term debt = Changes in debt)

In this paper, to compute the independent variable (net external financing) has been used a balance sheet approach. So, according to the above approach, the net external financing firm is calculated as follows:

             (4)

(Changes in Long-term debt + Changes in capital = Net external financing)

In calculating the net external financing has the following terms:

The meaning of is changes in the capital stock is resulting from the publishing and sale of new receivables shares and cash earned shareholders.

The calculated of , increase in capital reserve and retained earnings arising from the conversion or changes in the nominal money stock, is not considered.

In order of , changes in balance long-term debt that may result from long-term liabilities, including borrowings and repayment of received loans or are long-term commitments.

In order to neutralize the effects of small and large companies, the company's net financing and its components are defined based on the average of their assets. So, in this paper have been modified as follows:

 (5)

The needed data for the calculation of the balance of net external financing firms have been extracted from 2005 to 2016.

Dependent variables

Economic Value Added (EVA) is not a new concept. One of the performance measures of accounting is profit remains that as operating profit after deducting capital expenditures are defined and EVA actually modified version of the dividend remains with the adjustment of profits and capital is done [28-29]. EVA was calculated using the following equation:

             (6)

Net operating profit after taxes (NOPAT) and capital employed is calculated from the following equation and were implemented the modifications mentioned about them.

Adjustments + interest Tax savings - interest expense + Profit after tax = Net operating profit after taxes

Adjustments + Other long-term debt +Total interest-bearing debts + Equity = Employed Capital

Weighted average cost of capital (WACC) is composed of two principal components from sources cost and sources weight.

               (7)

Where,   is the Employed Weight Capital in the ordinary shares,  is the Employed cost Capital in the ordinary shares,  is the Weight of debt  and is the Cost of debt.

(Cost of Financing-Interest - bearing debts) * (1-T) = Cost of debt

Employed cost Capital in the ordinary shares = 1

In this research can be used from, profitability model to calculate the capital cost of the three growth models; Gordon, profitability and CAPM model. Sources of weights are the sum of market value of equity and book value of debt. The weight of debt and common stock is obtained from divided by the total weight of each source.

For each test research hypotheses, based on the information in the balance sheet and profit and loss firms sample, regression and correlation analyzes were performed by using statistical software. To test the hypothesis research in this present study, the relationship between external financing measure and EVA for Moroccan family businesses is investigated at the two levels. The first hypothesis of this study states that there is a significant and negative relationship between external financing and economic value added (EVA). The result of testing this hypothesis is depicted in (Table 2).  

Based on the Table 2 it can be concluded that, given Sig > 0.1, therefore, the hypothesis H2 that indicates absence of significant correlation between variables is accepted and this claim that there no significant correlation between external financing and economic value added is approved with 90% confidence level. Additionally, at the first level the relationship between the external financing net (XFIN) years of the sample companies with EVA reviewed and tested. Providing significant variables related at the first level, regression analysis is performed at second-level. At the second level, instead of external financing net (XFIN), components of the financing through equity (EQUITY) and financed through debt (DEBT) is measured by performance criteria. The test facility to investigate the effects of external financing practices (through equity and debt) of the companies surveyed was possible. The results of the linear regression tests for concerning hypotheses are presented in (Table 3). This test show that there is no significant correlation between external financing and economic value added in the case of Moroccan family firms. This result confirm the findings concluded by family-owned businesses under-invest because of information asymmetry problems and therefore will have a low need for external financing [29].

In this present research, we study the relationship among financing as capital structure and economic value added by employing correlation and regression analysis and. We utilize a sample composed by 9 Moroccan family businesses during the period from 2005 to 2016. The empirical findings that external financing and economic value added has been investigated. We can show that there is no significant relationship between the external financing and economic value added at 90 percent. We can conclude that there is no significant correlation between external financing and economic value added in the case of Moroccan family firms. So, we can accept the second hypothesis relative to the absence of a nexus among the external financing and economic value added. The empirical results find that family businesses are characterized by low debt levels as non-family businesses. In addition, family businesses appear to rely less on long-term borrowing than on short-term borrowing, which means that they prefer to run on their short-term leverage more often than not and have not been seriously concerned about long-term borrowing approach creditors whenever they need additional financing. Then, the second hypothesis can be accepted which find that there is no significant relationship between external financing and economic value added in the case of family business. Regarding the low debt level of family-owned businesses, we can explain this based on the theory presented by Jensen (1986), who argued that the presence of owners within their firms increases their ability to monitor managers and thus reducing the costs of the agency, making the disciplinary role of the debt less relevant and necessary.

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Table 1: List of family firms used in our study.

Table 2: Statistical Table of Pearson Correlation Coefficient for testing the hypothesis.

Table 3: Summary of estimation results.