Does Family Ownership Matter in Dividend Payout Decision? Evidence From a Family-Firm Dominated Country

Miah, M.S., & Bhuiyan, M.R.U (2022), Does Family ownership matter in dividend payout decision? Evidence from a family-firm dominated country, Journal of Business Studies, Vol. 42, Issue No. 3

32 Pages Posted: 5 May 2022 Last revised: 13 May 2022

See all articles by Muhammad Shahin Miah

Muhammad Shahin Miah

Coventry University; University of Dhaka

Date Written: April 20, 2022

Abstract

We examine the association between ownership structure and dividend payout policy in a family firms dominated economy. More specifically, we test whether family firms pay higher dividend compared to counter non-family firms in Bangladesh. We argue that family firms are more likely to pay higher dividend to display lower agency problems between controlling family and minority shareholders. Using 993 firm-year observations from 2011-2019, we find that, consistent with our arguments, family firms distribute higher dividend compared to non-family firms to mitigate expropriation concern of non-controlling shareholders. This study contributes to family business literature and provides policy implications in the sense that regulators understand the importance of ownership structure and how it affects firms’ dividend payout policy that serves shareholders’ interests.

Keywords: Family firm, dividend policy, ownership structure, developing economy, agency problems.

JEL Classification: M40, M48, M41, G32, G35

Suggested Citation

Miah, Muhammad Shahin, Does Family Ownership Matter in Dividend Payout Decision? Evidence From a Family-Firm Dominated Country (April 20, 2022). Miah, M.S., & Bhuiyan, M.R.U (2022), Does Family ownership matter in dividend payout decision? Evidence from a family-firm dominated country, Journal of Business Studies, Vol. 42, Issue No. 3, Available at SSRN: https://ssrn.com/abstract=4097068

Muhammad Shahin Miah (Contact Author)

Coventry University ( email )

Priory Street
Coventry
United Kingdom

University of Dhaka ( email )

Dhaka, 1000
Bangladesh
+8801999327767 (Phone)

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