Expropriation of minority shareholders and payout policy

Amedeo De Cesari

Research output: Contribution to journalArticlepeer-review


This paper studies the payout policy of Italian firms controlled by large majority shareholders (controlled firms). The paper reports that a firm’s share of dividends in total payout (dividends plus repurchases) is negatively related to the size of the cash flow stake of the firm’s controlling shareholder and positively associated with the wedge between the controlling shareholder’s control rights and cash flow rights. These findings are consistent with the substitute model of payout. One of the implications of this model is that controlled firms with weak corporate governance set-ups, in which controlling shareholders have strong incentives to expropriate minority shareholders, tend to prefer dividends over repurchases when disgorging cash.
Original languageEnglish
Pages (from-to)207-220
Number of pages14
JournalBritish Accounting Review
Issue number4
Publication statusPublished - Dec 2012


  • dividend
  • repurchase
  • controlling shareholder
  • minority shareholder
  • family firm


Dive into the research topics of 'Expropriation of minority shareholders and payout policy'. Together they form a unique fingerprint.

Cite this