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The effect of family business professionalization on dividend payout

Anneleen Michiels (Research Center for Entrepreneurship and Family Firms, Hasselt University, Diepenbeek, Belgium)
Lorraine Uhlaner (Department of Management and Strategy, EDHEC Business School, Roubaix, France)
Julie Dekker (Hasselt University, Diepenbeek, Belgium)

Journal of Small Business and Enterprise Development

ISSN: 1462-6004

Article publication date: 27 July 2017

Issue publication date: 30 October 2017




The topic of dividend policies of private family-controlled firms has aroused the interest of corporate finance and governance scholars and practitioners alike. However, a lot of questions concerning the dividends in privately held family firms remain unanswered. The purpose of this paper is to examine whether a private family firm’s dividend payout is influenced by its degree of professionalization.


The hypotheses are tested on a sample of 492 small to medium-sized Belgian family-controlled businesses with Tobit regression models.


The results show that professionalized family-controlled firms pay higher dividends to their shareholders than do less-professionalized firms. In particular, the use of financial control systems, non-family involvement in governance systems, and the use of human resource control systems have a positive significant impact on the average level of dividend payout.

Practical implications

This study may be of interest to family business consultants and (potential) investors, as the results contradict the assumption that family businesses (especially those privately held) will always have a no or low dividend policy.


Investigating dividend payout in the context of other components than family ownership (in this case, professionalization) can broaden our understanding of dividend payout.



Michiels, A., Uhlaner, L. and Dekker, J. (2017), "The effect of family business professionalization on dividend payout", Journal of Small Business and Enterprise Development, Vol. 24 No. 4, pp. 971-990.



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