Dividends and family governance practices in private family firms

Anneleen Michiels (), Wim Voordeckers (), Nadine Lybaert () and Tensie Steijvers ()

Small Business Economics, 2015, vol. 44, issue 2, 299-314

Abstract: Intra-familial principal–principal conflict are a relevant agency problem in privately held family firms. These conflicts of interest commonly occur between active and passive family shareholders, and require remedies different from those that deal with principal-agent conflicts. This article empirically examines whether or not firms use dividends as instruments to cope with conflicts of interest between active and passive family shareholders and how family governance practices moderate this relationship. The results show that the existence of an intra-familial conflict of interest results in a higher propensity to pay dividends and that the use of family governance practices strengthens this relationship. Additionally, the findings suggest that using family governance practices leads to a more efficient dividend policy. Copyright Springer Science+Business Media New York 2015

Keywords: Family firms; Dividends; Agency costs; Principal–principal conflict; Family governance; L2; L29; G35; L26 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:sbusec:v:44:y:2015:i:2:p:299-314

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DOI: 10.1007/s11187-014-9594-0

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