DIVIDENDS, MAJORITY CONTROL AND EXPROPRIATION

What is it about?

The purpose of this study is to determine whether there is a difference in the dividend payouts of family controlled holding and non-holding BG companies. Specifically, we examine the dividend payouts of family-controlled companies in both holding and non-holding BGs operating in Turkey, which is classified as a Eurasian emerging market with weak minority shareholder protection settings (World Economic Forum, 2017). Our objective is to empirically explore whether controlling families use dividends for rent extraction or for reputation building by examining the effects of several quantified control-enhancing mechanisms (CEMs) on dividend payouts. Within the frameworks of rent extraction and reputation building hypotheses, we focus on the question of whether holding BG companies behave differently in terms of their dividend payouts than non-holding BG companies.

Featured Image

Why is it important?

The article deals with the topics of majority control, control enhancing mechanisms, and their effects on dividend payouts. The focus is on shareholder expropriation in a weak investor protection environment.