Abstract

http://ssrn.com/abstract=222428
 
 

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Dividends and Expropriation


Mara Faccio


Purdue University - Krannert School of Management; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Larry H.P. Lang


The Chinese University of Hong Kong (CUHK) - Department of Finance

Leslie Young


The Chinese University of Hong Kong (CUHK) - Department of Finance

July 31, 2000

AFA 2001 New Orleans; EFMA Athens 2000

Abstract:     
In Western Europe and East Asia, capital markets require higher dividends from corporations tightly affiliated (at the 20% level of control) to a group and, within a group, from corporations whose controlling shareholder has a lower ratio O/C of ownership to control rights. For loosely-affiliated corporations (whose controlling shareholder holds between 10% and 20% of control rights), dividends are positively related to O/C, reflecting expropriation not contained by capital markets. Such corporations comprise 2.94% of European corporations, but 15.44 % of Asian corporations. In our 9 Asian economies, the 11 largest groups at the 10% level comprise 53.75% of all corporations and 84.58% of loosely-affiliated corporations, so most expropriation occurs here. Dividend are higher in Europe than in Asia; having multiple large shareholders increases dividends in Europe but decreases them in Asia.

Number of Pages in PDF File: 49

JEL Classification: G3, G35

working papers series


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Date posted: April 19, 2000  

Suggested Citation

Faccio, Mara and Lang, Larry H.P. and Young, Leslie, Dividends and Expropriation (July 31, 2000). AFA 2001 New Orleans; EFMA Athens 2000. Available at SSRN: http://ssrn.com/abstract=222428 or http://dx.doi.org/10.2139/ssrn.222428

Contact Information

Mara Faccio (Contact Author)
Purdue University - Krannert School of Management ( email )
1310 Krannert Building
West Lafayette, IN 47907-1310
United States
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
HOME PAGE: http://www.ecgi.org
Hsien Ping Larry Lang
The Chinese University of Hong Kong (CUHK) - Department of Finance ( email )
Shatin, N.T.
Hong Kong
+85 2 2609 7761 (Phone)
+85 2 2603 6586 (Fax)
Leslie S.F. Young
The Chinese University of Hong Kong (CUHK) - Department of Finance ( email )
Shatin, N.T.
Hong Kong
852 2609 7421 (Phone)
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References:  52
Citations:  193
Footnotes:  25

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