This article investigates the influence of family involvement on firm performance in an emerging market economy. Using a panel of 217 Polish companies from 1997 to 2005, the authors find an inverted U-shaped relationship between the share of family ownership and firm performance. The data also reveal that firms with family CEOs are likely to outperform their counterparts that have nonfamily CEOs. The results take into account the endogeneity of family ownership and are robust to a number of specification checks.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We find evidence that an increase in the TDI or its subindices leads to an increase in the dividend-to-cash-flow ratio. These results support the hypothesis that companies with weak shareholder rights pay dividends less generously than do firms with high corporate governance standards. Therefore, minority shareholders often use power to extract dividends. We also find that large and more profitable companies have a higher dividend payout ratio, while riskier and more indebted firms prefer to pay lower dividends. Terms of use: Documents in

This study examines the relation between corporate governance practices measured by the Transparency Disclosure Index (TDI) and dividend payouts in Poland. Our empirical approach lies in constructing measures of the quality of the corporate governance in 110 non-financial companies listed on the Warsaw Stock Exchange between 1998 and 2004.We find evidence that an increase in the TDI or its sub-indices leads to an increase in the dividend to cash flow ratio. These results support the hypothesis that companies with weak shareholder rights pay dividends less generously than do firms with high corporate governance standards. We assume that well protected shareholders in Poland use their power to extract dividends, thus our results seem to support the outcome agency model of dividends.

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