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