Most of the literature about dividend policy have dealt with dispersed ownership firms (Isakov & Weisskopf, 2013) while most firms around the world are controlled by large shareholders (Faccio & Lang, 2002) whose preferences undoubtedly affect dividend payouts (DeAngelo, DeAngelo, & Skinner, 2007). Particularly, as families are the most common type of large shareholders in the world (Isakov & Weisskopf, 2013), taking into account the specific characteristics of family firms would help our understanding of their behavior in terms of dividend payout. Previous research have shown that making strategic and financial decisions in family firms may be based on Socio-Emotional Wealth (SEW) and that these decisions do not necessarily follow an economic rationale (Gomez-Mejia, Makri, & Kintana, 2010; Berrone, Cruz, & Gomez-Mejia, 2012). Therefore, this study aims at extending family business literature dealing with dividend payout in family firms (Charlier & Du Boys, 2011; González, Guzmán, Pombo, & Trujillo, 2014; Isakov & Weisskopf, 2015) by focusing on the effect of family involvement on family firms’ dividend policy. More precisely, the main goal of this study is to investigate how the importance of SEW, and more precisely how the owning family’s desire to keep control and influence on the firm’s operations explains family firms’ payout decisions. Using a sample of 28 publicly listed Tunisian firms for the period (2007 – 2014), our results show that family firms pay out less dividends than non-family firms. More precisely, the findings show that keeping family control through high family ownership and high family involvement in management negatively affect dividend payouts in family firms. This research focuses also on the role played by governance mechanisms in reducing the SEW’s negative effects on a family firms’ dividend payouts. While board characteristics have no effect on dividend payments in Tunisian-listed family firms, our results show that when a second significant non-family shareholder is involved, this reduces the family firms’ dividend payouts.
Hammouda, A. and Basly, S. (2020). “Socioemotional Wealth, Corporate Governance and Dividend Payout Decisions in Family Firms. Evidence from listed firms in Tunisia”. Gestion 2000, Vol. 37, n°6.