Do Family Firms Use Dividend Policy as a Governance Mechanism? Evidence from the Euro zone

[EN] Manuscript Type:EmpiricalResearch Question/Issue:This study investigates whether family firms use dividend policy as a corporate governancemechanism to overcome agency problems between the controlling family and minority investors. We further account fordeviations between ownership and control...

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Autores: Pindado García, Julio, Requejo Puerto, Ignacio, De la Torre, Chabela
Tipo de recurso: artículo
Estado:Versión publicada
Fecha de publicación:2012
País:España
Institución:Universidad de Salamanca (USAL)
Repositorio:GREDOS. Repositorio Institucional de la Universidad de Salamanca
OAI Identifier:oai:gredos.usal.es:10366/149743
Acceso en línea:http://hdl.handle.net/10366/149743
Access Level:acceso abierto
Palabra clave:Corporate Governance
Family Control
Dividend Policy
Second Blockholders
Eurozone
5311 Organización y Dirección de Empresas
5307.13 Teoría de la Inversión
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repository_id_str
spelling Do Family Firms Use Dividend Policy as a Governance Mechanism? Evidence from the Euro zonePindado García, JulioRequejo Puerto, IgnacioDe la Torre, ChabelaCorporate GovernanceFamily ControlDividend PolicySecond BlockholdersEurozone5311 Organización y Dirección de Empresas5307.13 Teoría de la Inversión[EN] Manuscript Type:EmpiricalResearch Question/Issue:This study investigates whether family firms use dividend policy as a corporate governancemechanism to overcome agency problems between the controlling family and minority investors. We further account fordeviations between ownership and control and consider the presence and identity of other large shareholders in familycompanies.Research Findings/Insights:Based on a sample of firms from nine Eurozone countries and using a panel data method, wefind that family firms distribute higher and more stable dividends to alleviate expropriation concerns of minority investors.However, the higher dividend payments are mainly explained by family firms with no separation between the largestowner’s voting and cash flow rights and those with non-family second blockholders.Theoretical/Academic Implications:We contribute to the literature by shedding light on how the family business modelaffects companies’ dividend preferences. Our research also highlights the importance of taking into account the identity oflarge shareholders, especially in a context in which concentrated ownership structures are commonplace. The reporteddifferences in dividend policies between family and non-family firms help to clarify the variant performances of familybusinesses found in previous studies.Practitioner/Policy Implications:Family firms should regard dividend policy as a governance tool that allows them toattract prospective investors and enlarge their shareholder base. Simultaneously, minority investors can benefit from familyfirms’ dividend decisions. Our evidence also suggests that European policy makers should lay the necessary foundations toprevent controlling families from adopting ownership structures that serve their own personal interests.Wiley Online Library202220222012info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionhttp://hdl.handle.net/10366/149743reponame:GREDOS. Repositorio Institucional de la Universidad de Salamancainstname:Universidad de Salamanca (USAL)InglésAttribution-NonCommercial-NoDerivatives 4.0 Internacionalhttp://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/openAccessoai:gredos.usal.es:10366/1497432026-06-07T06:28:51Z
dc.title.none.fl_str_mv Do Family Firms Use Dividend Policy as a Governance Mechanism? Evidence from the Euro zone
title Do Family Firms Use Dividend Policy as a Governance Mechanism? Evidence from the Euro zone
spellingShingle Do Family Firms Use Dividend Policy as a Governance Mechanism? Evidence from the Euro zone
Pindado García, Julio
Corporate Governance
Family Control
Dividend Policy
Second Blockholders
Eurozone
5311 Organización y Dirección de Empresas
5307.13 Teoría de la Inversión
title_short Do Family Firms Use Dividend Policy as a Governance Mechanism? Evidence from the Euro zone
title_full Do Family Firms Use Dividend Policy as a Governance Mechanism? Evidence from the Euro zone
title_fullStr Do Family Firms Use Dividend Policy as a Governance Mechanism? Evidence from the Euro zone
title_full_unstemmed Do Family Firms Use Dividend Policy as a Governance Mechanism? Evidence from the Euro zone
title_sort Do Family Firms Use Dividend Policy as a Governance Mechanism? Evidence from the Euro zone
dc.creator.none.fl_str_mv Pindado García, Julio
Requejo Puerto, Ignacio
De la Torre, Chabela
author Pindado García, Julio
author_facet Pindado García, Julio
Requejo Puerto, Ignacio
De la Torre, Chabela
author_role author
author2 Requejo Puerto, Ignacio
De la Torre, Chabela
author2_role author
author
dc.subject.none.fl_str_mv Corporate Governance
Family Control
Dividend Policy
Second Blockholders
Eurozone
5311 Organización y Dirección de Empresas
5307.13 Teoría de la Inversión
topic Corporate Governance
Family Control
Dividend Policy
Second Blockholders
Eurozone
5311 Organización y Dirección de Empresas
5307.13 Teoría de la Inversión
description [EN] Manuscript Type:EmpiricalResearch Question/Issue:This study investigates whether family firms use dividend policy as a corporate governancemechanism to overcome agency problems between the controlling family and minority investors. We further account fordeviations between ownership and control and consider the presence and identity of other large shareholders in familycompanies.Research Findings/Insights:Based on a sample of firms from nine Eurozone countries and using a panel data method, wefind that family firms distribute higher and more stable dividends to alleviate expropriation concerns of minority investors.However, the higher dividend payments are mainly explained by family firms with no separation between the largestowner’s voting and cash flow rights and those with non-family second blockholders.Theoretical/Academic Implications:We contribute to the literature by shedding light on how the family business modelaffects companies’ dividend preferences. Our research also highlights the importance of taking into account the identity oflarge shareholders, especially in a context in which concentrated ownership structures are commonplace. The reporteddifferences in dividend policies between family and non-family firms help to clarify the variant performances of familybusinesses found in previous studies.Practitioner/Policy Implications:Family firms should regard dividend policy as a governance tool that allows them toattract prospective investors and enlarge their shareholder base. Simultaneously, minority investors can benefit from familyfirms’ dividend decisions. Our evidence also suggests that European policy makers should lay the necessary foundations toprevent controlling families from adopting ownership structures that serve their own personal interests.
publishDate 2012
dc.date.none.fl_str_mv 2012
2022
2022
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv http://hdl.handle.net/10366/149743
url http://hdl.handle.net/10366/149743
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.rights.none.fl_str_mv Attribution-NonCommercial-NoDerivatives 4.0 Internacional
http://creativecommons.org/licenses/by-nc-nd/4.0/
info:eu-repo/semantics/openAccess
rights_invalid_str_mv Attribution-NonCommercial-NoDerivatives 4.0 Internacional
http://creativecommons.org/licenses/by-nc-nd/4.0/
eu_rights_str_mv openAccess
dc.publisher.none.fl_str_mv Wiley Online Library
publisher.none.fl_str_mv Wiley Online Library
dc.source.none.fl_str_mv reponame:GREDOS. Repositorio Institucional de la Universidad de Salamanca
instname:Universidad de Salamanca (USAL)
instname_str Universidad de Salamanca (USAL)
reponame_str GREDOS. Repositorio Institucional de la Universidad de Salamanca
collection GREDOS. Repositorio Institucional de la Universidad de Salamanca
repository.name.fl_str_mv
repository.mail.fl_str_mv
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