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Dual-class share structure and dividend smoothing

Author

Listed:
  • Dong, Longxu
  • Zhang, Haomin
  • Huang, Yongjian

Abstract

This paper delves into the implications of the dual-class share structure, an increasingly prevalent ownership model, for dividend smoothing behaviors. Using a large sample of the U.S., our analysis reveals that firms with dual-class share structures exhibit lesser dividend smoothing behaviors compared to their single-class counterparts. The influence of the dual-class share structure on dividend smoothing is more significant among firms characterized by high free cash flows, limited growth prospects, and those in their mature stages. Furthermore, we observe a higher propensity for dividend reductions or omissions in dual-class firms.

Suggested Citation

  • Dong, Longxu & Zhang, Haomin & Huang, Yongjian, 2024. "Dual-class share structure and dividend smoothing," Finance Research Letters, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:finlet:v:61:y:2024:i:c:s1544612324000011
    DOI: 10.1016/j.frl.2024.104971
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