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Nonfinancial Goals, Governance, and Dividend Payout in Private Family Firms

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  • Sigrid Vandemaele
  • Mark Vancauteren

Abstract

This paper uses insights from behavioral economics to explain dividend policy in private family firms. Based on a sample of 501 elgian firms, our results indicate that dividend payout is low when a family chief executive officer () leads the business and in the presence of a family‐dominated board. The tendency of a family or family‐dominated board to retain earnings appears to be stronger in earlier generational stages compared with later generational stages. The findings are consistent with (1) socioemotional objectives being important drivers of funding decisions in private firms where families possess important decision and control power and (2) these objectives being more predominant in early generational stages.

Suggested Citation

  • Sigrid Vandemaele & Mark Vancauteren, 2015. "Nonfinancial Goals, Governance, and Dividend Payout in Private Family Firms," Journal of Small Business Management, Taylor & Francis Journals, vol. 53(1), pages 166-182, January.
    • Handle: RePEc:taf:ujbmxx:v:53:y:2015:i:1:p:166-182
    DOI: 10.1111/jsbm.12063
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    Cited by:

    1. Miller, Danny & Amore, Mario Daniele & Quarato, Fabio & Corbetta, Guido, 2022. "Family Ownership Dispersion and Dividend Payout in Family Firms," Journal of Family Business Strategy, Elsevier, vol. 13(3).
    2. DODERO ORTIZ DE ZEVALLOS Gino Felix & CLEMENTE-ALMENDROS José Antonio & BAHAMONDES ROSADO María Emilia, 2023. "The Covid-19 Crisis And The Financial Impact On Family Firms," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 18(2), pages 86-108, August.
    3. Susana Álvarez‐Díez & J. Samuel Baixauli‐Soler & María Belda‐Ruiz & Gregorio Sánchez‐Marín, 2023. "Variable selection for classification and forecasting of the family firm's socioemotional wealth," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 42(8), pages 2063-2078, December.
    4. 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.

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