On The Impact Of Family Versus Institutional Blockholders On Dividend Policy

Abstract

This paper investigates the effect of not only the controlling shareholders but also their identity on dividend policy. For a large panel of French firms during the period 2006-2010, we find that the dividend payout ratio increases with the ownership concentration. However, this result changes with the identity of the largest shareholder. Family-controlled firms are more tempted to distribute lower dividends while firms dominated by institutional investors likely distribute higher dividends. Empirical results also reveal that firms with more independent directors are associated with higher dividend payout in contrast to US cross-listed firms.