Stockholder Conflicts and Dividend Payout
Working paper
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http://hdl.handle.net/11250/95408Utgivelsesdato
2011Metadata
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Sammendrag
This paper examines how dividend policy influences conflicts of interest between majority and
minority stockholders in a large sample of private firms with controlling blockholders. We find
that a higher potential for stockholder conflicts is associated with higher payout. This tendency is
stronger when the minority stockholder structure is diffuse and when the minority is not on the
firm’s board. Minority-friendly payout is also associated with higher subsequent minority
investment in the firm. These findings are consistent with the notion that dividend policy is used
to mitigate agency costs, particularly when this benefits the majority in the longer run.