Small Business Economics

, Volume 44, Issue 2, pp 299–314 | Cite as

Dividends and family governance practices in private family firms

  • Anneleen Michiels
  • Wim Voordeckers
  • Nadine Lybaert
  • Tensie Steijvers


Intra-familial principal–principal conflict are a relevant agency problem in privately held family firms. These conflicts of interest commonly occur between active and passive family shareholders, and require remedies different from those that deal with principal-agent conflicts. This article empirically examines whether or not firms use dividends as instruments to cope with conflicts of interest between active and passive family shareholders and how family governance practices moderate this relationship. The results show that the existence of an intra-familial conflict of interest results in a higher propensity to pay dividends and that the use of family governance practices strengthens this relationship. Additionally, the findings suggest that using family governance practices leads to a more efficient dividend policy.


Family firms Dividends Agency costs Principal–principal conflict Family governance 

JEL classifications

L2 L29 G35 L26 


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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Anneleen Michiels
    • 1
  • Wim Voordeckers
    • 2
  • Nadine Lybaert
    • 2
  • Tensie Steijvers
    • 2
  1. 1.Faculty of Economics and Business, Research Centre for Entrepreneurship and Family BusinessKU LeuvenBrusselsBelgium
  2. 2.KIZOK Research CentreHasselt UniversityHasseltBelgium

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