Family Ownership and Dividend Policy: Empirical Evidence from Malaysia

  •  Vasanthan Subramaniam    


The objective of this study is to investigate the relationship between family ownership and dividend in Malaysian publicly listed firms. Malaysia served as a distinctive country to conduct this research as the corporate structure is largely characterised as family owned and the corporate firms are highly involved in high and stable dividends. The study uses data from 712 firms over the period of five (5) years from the year 2010 to 2014. Adjusted ordinary least square (OLS) regression methods are employed to analyse the data used in the study. Based on the results, family ownership is seen to have a significant positive relationship with dividends in Malaysia, especially in family firms. The finding has supported the reputational view of dividend, mitigation of agency conflict and dividends as the source of income for the family shareholders. However, the expropriation motive of the controlling family shareholders can still be relevant as high dividends were certainly paid to themselves as they are the majority shareholders in the firm. The contribution of the study lies in the behaviour of the controlling family shareholders in both family and non-family firms in Malaysia. The actual motives of them in relation to the enhancement of the shareholders’ wealth can be revealed through the findings of this study.

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