Pay-Out Policies in Founding Family Firms

SES Working Paper No. 443

35 Pages Posted: 8 May 2011 Last revised: 3 May 2014

See all articles by Dušan Isakov

Dušan Isakov

University of Fribourg (Switzerland) - Faculty of Management, Economics and Social Sciences

Jean-Philippe Weisskopf

EHL Hospitality Business School

Date Written: February 10, 2014

Abstract

This article analyses founding family influence on pay-out policies for Swiss listed firms over the period 2003-2010. We hypothesise that family firms have different incentives and characteristics that affect pay-out decisions and propose three possible explanations: agency theory, reputation building and family income needs. Our results show that founding family firms display significantly higher dividend pay-outs relative to companies with other ownership structures. We also examine specific family characteristics and document that the family stake, the active involvement and generation of the family play an important role for pay-out policies. Our findings appear to be consistent with the family income hypothesis and to some extent with reputational concerns.

Keywords: founding family firms, dual-class shares, payout policy, dividends, share repurchases, minority shareholders, private benefits

JEL Classification: G32, G35

Suggested Citation

Isakov, Dušan and Weisskopf, Jean-Philippe, Pay-Out Policies in Founding Family Firms (February 10, 2014). SES Working Paper No. 443, Available at SSRN: https://ssrn.com/abstract=1834342 or http://dx.doi.org/10.2139/ssrn.1834342

Dušan Isakov

University of Fribourg (Switzerland) - Faculty of Management, Economics and Social Sciences ( email )

Fribourg, CH 1700
Switzerland

HOME PAGE: http://www3.unifr.ch/cgf/en/

Jean-Philippe Weisskopf (Contact Author)

EHL Hospitality Business School ( email )

Route de Cojonnex 18
Lausanne, 1000
Switzerland

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