Analysis of dividend policy of dual and single class U.S corporations

Ben Amoako-Adu, Vishaal Baulkaran and Brian F. Smith

Journal of Economics and Business, 2014, vol. 72, issue C, 29 pages

Abstract: Despite the extensive literature on dividend policy, little is known about the relationship between controlling shareholders and the determination of dividend policy, especially in dual class companies. Three potential dividend policy hypotheses are examined. We show that dual class companies pay out less cash dividends and repurchase fewer shares and that cash distributions decrease as the divergence of voting and cash flow rights widens. This is consistent with both the private benefits and family legacy hypotheses. However, an examination of executive compensation and family participation on the board indicates that lower dividends are consistent with the private benefits hypothesis.

Keywords: Dual class structure; Concentrated ownership; Dividend policy; Private benefits; Family firms (search for similar items in EconPapers)
JEL-codes: G32 G34 G35 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0148619513000660
Full text for ScienceDirect subscribers only

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:eee:jebusi:v:72:y:2014:i:c:p:1-29

DOI: 10.1016/j.jeconbus.2013.10.002

Access Statistics for this article

Journal of Economics and Business is currently edited by Emanuele Bajo and Moritz Ritter

More articles in Journal of Economics and Business from Elsevier
Bibliographic data for series maintained by Catherine Liu ().