Do Shareholder Coalitions Modify Dominant Owner's Control? The Impact On Dividend Policy

Félix López-Iturriaga () and Domingo Santana-Martin ()
Additional contact information
Domingo Santana-Martin: Universidad de Las Palmas de Gran Canaria

HSE Working papers from National Research University Higher School of Economics

Abstract: We examine the effect of shareholder coalitions on the corporate payout policy in Spain, a context characterized by the presence of dominant shareholders. Our results show that shareholder coalitions affect payout policy negatively (both for dividends and shares repurchases). This finding suggests that shareholder coalitions serve as an instrument for the dominant shareholder’s to extract private benefits. We also find that the relation between the voting rights involved in the coalition and the dominant owner?s voting rights is negatively related to dividends. This result means that the dominant owner uses the coalition as a mechanism to amplify his or her control over the firm and reduce the cost of expropriation. The results provide new evidence on the effects of corporate control mechanisms on shareholders wealth; this evidence is complementary to the US or UK centered research, where dominant ownership is not as prevalent and, thus, it is more difficult to capture these effects

Keywords: shareholder coalitions; dividends; repurchases; dominant owner; ownership structure; payout (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2015
New Economics Papers: this item is included in nep-cdm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in WP BRP Series: Financial Economics / FE, January 2015, pages - 32

Downloads: (external link)
http://www.hse.ru/data/2015/02/17/1092170081/38FE2014.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hig:wpaper:41/fe/2015

Access Statistics for this paper

More papers in HSE Working papers from National Research University Higher School of Economics
Bibliographic data for series maintained by Shamil Abdulaev () and Shamil Abdulaev ().