The impact of family-CEOs and their demographic characteristics on dividend payouts: Evidence from Latin America

Guadalupe D.C. Briano-Turrent, Mingsheng Li and Hongfeng Peng

Research in International Business and Finance, 2020, vol. 51, issue C

Abstract: We investigate the effect of family-CEOs and CEO demographic characteristics on firms’ dividend policy in Latin America. We show that family-CEO firms pay less amount of dividends and invest more in capital expenditures than nonfamily-CEO firms do. Direct family ownership (ownership concentration) negatively (positively) affects dividend payouts. Among the CEO demographic characteristics, CEO tenure has a consistent and significant negative effect on the dividend payout. Firms in a strong corporate governance environment pay more dividends and are less likely to appoint family members as CEOs, suggesting that strong corporate governance forces firms to pay more dividends and restrains firms from appointing CEOs based on family ties.

Keywords: Family firms; Agency issue; Dividend policy; Direct family ownership (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:51:y:2020:i:c:s027553191930604x

DOI: 10.1016/j.ribaf.2019.101086

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