Dividends, leverage, and family ownership in the emerging Indonesian market

Evy Mulyani, Harminder Singh and Sagarika Mishra

Journal of International Financial Markets, Institutions and Money, 2016, vol. 43, issue C, 16-29

Abstract: We examine the roles of dividends and leverage to mitigate agency problems within family firms in Indonesia. Using simultaneous equations, we find a significant negative association between family ownership and dividend payout and a two-way negative relation between dividend payout and leverage. Our analysis reveals that, compared to non-family firms, family firms tend to maintain a lower dividend pay-out and higher leverage. The presence of large non-family ownership appears to have an impact on determining levels of private benefit control. During the Asian and global financial crisis, family firms changed their dividend pay-out more than non-family firms did.

Keywords: Dividend; Leverage; Family ownership (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:43:y:2016:i:c:p:16-29

DOI: 10.1016/j.intfin.2016.03.004

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