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Influence of family-centered goals on dividend policy in family firms: A socioemotional wealth approach

Author

Listed:
  • María Belda-Ruiz

    (University of Murcia)

  • Gregorio Sánchez-Marín

    (University of Alcala)

  • J. Samuel Baixauli-Soler

    (University of Murcia)

Abstract

Socioemotional wealth (SEW) preservation is likely to be a key determinant for family firms when shaping their dividend policy. This paper analyzes how family-centered goals reflected by SEW can influence dividend policy in private family firms and explores how family involvement in management, generational stage, and firm hazard might moderate these relationships. Results indicate a negative association between SEW preservation and both the likelihood of giving dividends and the amount of dividend paid. This negative relationship is stronger when the CEO is a family member, in early generational stages and when the firm faces greater performance hazard. The amount of dividend paid is also lower when there are family members in other top management positions apart from the CEO. The evidence provided thus suggests that the existing heterogeneity in dividend policy in privately held family firms is strongly driven by differences in SEW priorities.

Suggested Citation

  • María Belda-Ruiz & Gregorio Sánchez-Marín & J. Samuel Baixauli-Soler, 2022. "Influence of family-centered goals on dividend policy in family firms: A socioemotional wealth approach," International Entrepreneurship and Management Journal, Springer, vol. 18(4), pages 1503-1526, December.
    • Handle: RePEc:spr:intemj:v:18:y:2022:i:4:d:10.1007_s11365-021-00741-x
    DOI: 10.1007/s11365-021-00741-x
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