The impact of family control and internal governance mechanisms on dividend policy

The Case of Companies Listed on the Moroccan Stock Market

  • Adil El mallouky Faculty of Law, Economics and Social Sciences , Cadi Ayyad University of Marrakech, Morocco
  • khalid Elouafa Polydisciplinary Faculty of Safi, Cadi Ayyad University of Marrakech, Morocco
Keywords: dividend policy, involvement of family shareholders, corporate governance mechanisms, agency conflicts

Abstract

The purpose of this work is to examine the determinants of the dividend distribution policy, more particularly we will highlight the effect of the involvement of family shareholders in the company and the internal governance mechanisms on the dividend payment decisions of companies listed on the Moroccan stock exchange. To answer our research questions, we used a TOBIT model estimate based on a sample of 160 observations per year-listed company over the period 2015-2018. The results of this study indicate a negative relationship between family ownership and the dividend payout ratio. In addition, the presence of a family CEO has a negative effect on the level of dividend distributed. In contrast, we note that the use of control mechanisms by pyramid structures does not have a significant impact on dividend distribution. In terms of the effect of the characteristics of governance mechanisms on dividend payments, we find a positive association between the presence of a second institutional block holder and dividend distribution. We also find a negative relationship between the duality of the board of directors and the distribution of dividends, while the presence of independent directors on the board of directors has no significant impact on the distribution of dividends.

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Published
2020-11-20
How to Cite
El mallouky, A., & Elouafa, khalid. (2020). The impact of family control and internal governance mechanisms on dividend policy: The Case of Companies Listed on the Moroccan Stock Market. International Journal of Accounting, Finance, Auditing, Management and Economics, 1(3), 212-229. https://doi.org/10.5281/zenodo.4282171
Section
Articles