Pay-out policies in founding family firms

Dusan Isakov and Jean-Philippe Weisskopf

Journal of Corporate Finance, 2015, vol. 33, issue C, 330-344

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 a family's stake, active involvement and generation play an important role in determining 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; Pay-out policy; Dividends; Minority shareholders; Family income; Reputation (search for similar items in EconPapers)
JEL-codes: G32 G35 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:33:y:2015:i:c:p:330-344

DOI: 10.1016/j.jcorpfin.2015.01.003

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