Dividends, leverage, and family ownership in the emerging Indonesian market
journal contribution
posted on 2016-07-01, 00:00 authored by E Mulyani, Harminder SinghHarminder Singh, Sagarika MishraSagarika MishraWe examine the roles of dividends and leverage to mitigate agency problems within family firms in Indonesia. Using simultaneous equations, we find a significant negative association between family ownership and dividend payout and a two-way negative relation between dividend payout and leverage. Our analysis reveals that, compared to non-family firms,family firms tend to maintain a lower dividend pay-out and higher leverage. The presence of large non-family ownership appears to have an impact on determining levels of private benefit control. During the Asian and global financial crisis, family firms changed their dividend pay-out more than non-family firms did.
History
Journal
Journal of International Financial Markets, Institutions and MoneyVolume
43Season
July 2016Pagination
16-29Location
Amsterdam, The NetherlandsPublisher DOI
ISSN
1042-4431Language
EnglishPublication classification
C Journal article, C1 Refereed article in a scholarly journalCopyright notice
2016, Elsevier B.V.Publisher
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Keywords
Social SciencesBusiness, FinanceEconomicsBusiness & EconomicsDividendLeverageFamily ownershipCORPORATE GOVERNANCEFIRM PERFORMANCEAGENCY COSTSINVESTOR PROTECTIONLARGE SHAREHOLDERSPOLICYMANAGEMENTMECHANISMSDEBTdividendleveragefamily ownership150201 Finance900101 Finance ServicesDepartment of Finance3502 Banking, finance and investment3501 Accounting, auditing and accountability
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