Work

Dividends and Expropriation

Year: 2001

Type: article

Abstract: Whereas most U.S. corporations are widely held, the predominant form of ownership in East Asia is control by a family, which often supplies a top manager. These features of “crony capitalism” are actually more pronounced in Western Europe. In both regions, the salient agency problem is expropriation of outside shareholders by controlling shareholders. Dividends provide evidence on this. Group-affiliated corporations in Europe pay higher dividends than in Asia, dampening insider expropriation. Dividend rates are higher in Europe, but lower in Asia, when there are multiple large shareholders, suggesting that they dampen expropriation in Europe, but exacerbate it in Asia. (JEL G34, G35)

Source: American Economic Review

DOI: 10.1257/aer.91.1.54

Authors: Mara Faccio, Larry H. P Lang, Leslie Young

Institutions: Università Cattolica del Sacro Cuore, Chinese University of Hong Kong

Language: English

Topic: Corporate Finance and Governance

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: green

OpenAlex ID: W3124737349

FWCI: 38.72

Cites: 65

Cited by: 1,781

Related to: 10