Corporate Payout Policies in Family-Owned vs. Public Firms

Abstract

This paper investigates the differences in corporate payout policies between family-owned and publicly listed firms, employing a mixed-method design that combines panel econometric modeling with qualitative case analysis. Drawing on data , the study demonstrates that family firms pursue conservative payout strategies characterized by lower dividend yields, reduced repurchase intensity, and stronger dividend smoothing behavior. These patterns reflect family owners’ emphasis on socioemotional wealth preservation, succession planning, and financial flexibility. In contrast, public firms adopt more aggressive payout policies, maintaining higher dividend yields and frequent buybacks to satisfy shareholder expectations and signal financial stability. Institutional environments further shape these outcomes, with weaker investor protection amplifying payout conservatism in family firms and stronger legal systems narrowing the ownership gap. Evidence from the COVID-19 pandemic confirms that family firms reduced payouts to safeguard liquidity, while public firms sustained dividends despite rising leverage pressures. The results underscore that payout policy is influenced not only by financial fundamentals but also by governance, cultural, and institutional factors. The study contributes to corporate finance literature by integrating agency theory, behavioral governance, and institutional perspectives, while offering implications for regulators, investors, and managers.