A Study on the Relationship between the Family Control and Dividend Decision of the Listed Company
There are two groups of agency problems exist in a family-controlled listed company. One is the agency problem between shareholders and mangers, and the other is problem between the controlling family and the minority shareholders of the listed company. Our study on dividend decision of family-controlled listed companies reveals that the dividend decision of these companies in China is not made for the purpose of avoiding the risk of managers’ abuse of free cash flow but for the maximization of family profits. The higher cash flow rights the controlling family has, the higher tendency the company has to pay out high dividend and the stronger desire it has for irrational dividend payment. On the contrary, a higher separation degree of the control rights and cash flow rights in a company will lead to its tendency to pay a relatively low dividend or even not to pay any thus result in a weaker desire for irrational dividend payment. Our empirical study also finds that the family-controlled listed company takes the advantage of dividend decision to control the ROE to satisfy the need to refinance.
family control dividend agency problem
Deng Jian-ping Zeng Yong
School of Management, UEST of China, Chengdu 610054, China
国际会议
昆明
英文
2005-07-05（万方平台首次上网日期，不代表论文的发表时间）