Corporate governance in Taiwan: The nonmonotonic relationship between family ownership and dividend policy

• Main Authors: Yu-ting Huang, 黃郁婷
• Other Authors: Anlin Chen
• Format: Others
• Language: en_US
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/50713971926367068883

博士 === 國立中山大學 === 企業管理學系研究所 === 100 === This study examines the relationship between cash flow rights and dividend payout policy of listed family firms in Taiwan, an economy characterized by a predominance of family-controlled firms. Dividend payout levels are important because they are crucial to governing the firm and managing its investments. The empirical results show that at a low level of controlling families’ cash flow rights, the threat to lose control any time makes controlling families claim more in dividends. This yields a positive relationship between dividend payout and the cash flow rights of controlling families. Meanwhile, at a moderate level of controlling families’ cash flow rights, the entrenchment effect creates a negative relationship. Finally, at the very highest level of controlling families’ cash flow rights, excessive firm-specific risk again yields a positive relationship. This nonmonotonic relationship between controlling family cash flow rights and dividend payout also holds for financially mature firms that have high earned to contributed capital mix.