The Role of Dividends, Debt and Board Structure in the Governance of Family Controlled Firms
We investigate whether family controlled firms use dividends, debt and board structure to exacerbate or mitigate agency problems between controlling and minority shareholders in a capital market environment with high investor protection and private benefits of control. Results indicate family controlled firms employ higher dividend payout ratios, higher debt levels and lower levels of board independence compared to non-family firms. This suggests family controlled firms use either dividends or debt as a substitute for independent directors. We also find that dividends and debt are more effective governance mechanisms in mitigating the families' expropriation of minority shareholders' wealth. Independent directors are, in contrast, more effective in controlling owner-manager conflict in non-family firms. Copyright (c) 2009 The Authors Journal compilation (c) 2009 Blackwell Publishing Ltd.
Year of publication: |
2009-09
|
---|---|
Authors: | Setia-Atmaja, Lukas ; Tanewski, George A. ; Skully, Michael |
Published in: |
Journal of Business Finance & Accounting. - Wiley Blackwell, ISSN 0306-686X. - Vol. 36.2009-09, 7-8, p. 863-898
|
Publisher: |
Wiley Blackwell |
Saved in:
freely available
Saved in favorites
Similar items by person
-
The role of dividends, debt and board structure in the governance of family controlled firms
Setia-Atmaja, Lukas, (2009)
-
The Role of Dividends, Debt and Board Structure in the Governance of Family Controlled Firms
Setia-Atmaja, Lukas, (2009)
-
A study of work-family conflict in American and Australian family businesses
Smyrnios, Kosmas X., (2008)
- More ...