The Global Financial Crisis, Family Control and Dividend Policy
37 Pages Posted: 27 Jan 2014 Last revised: 12 Oct 2015
Date Written: August 30, 2015
Using newly collected data on the ultimate ownership structure of publicly traded firms in nine East Asian economies, we find that family control is negatively related to the dividend payout ratio. Family firms are less (more) likely to increase (omit) dividends than non-family firms. These negative associations between family firms and dividend policy are more pronounced during the recent global financial crisis, suggesting that controlling families have incentives to expropriate more firm resources during crises than in normal times.
Keywords: Family control, Agency costs, Dividend policy, East Asia, Financial crisis
JEL Classification: G32, G35
Suggested Citation: Suggested Citation