This paper studies the payout policy of Italian firms controlled by large majority shareholders (controlled firms). The … controlling shareholders have strong incentives to expropriate minority shareholders, tend to prefer dividends over repurchases …

We study the role of state controlling shareholders in corporate payout policy. We exploit as an exogenous event the …-owned enterprises (listed CSOEs) controlled by these parent CSOEs experience a significant reduction in dividend payouts. The reduction … in dividend payouts is concurrent with an increase in intra-group capital flows: listed CSOEs' loans to group peers and …

expropriation hypothesis predicts that dual-class firms pay out less to shareholders because entrenched managers want to maximize … dual-class firms pay out more to shareholders because firms use corporate payouts as a pre-commitment device to mitigate … agency costs. Our results support the pre-commitment hypothesis. Dual-class firms have higher cash dividend payments and …