Payout Policy and Agency Concerns: A Study on Differences in Payout Ratios and Payout Mix between Dual and Single-Class Firms

Sammanfattning: Purpose: The purpose of this study is to investigate if there is any difference in payout policies between firms that adopt a dual-class share structure compared to a single-class share structure. Methodology: We are using an unbalanced panel data set of firms that are listed on the Stockholm Stock Exchange (SSE). The econometric approach is based on pooled ordinary least square regressions, random effects models as well regressing against propensity score matched sample to deal with endogeneity. We also provide several robustness checks against potential misspecifications of dependent variables. Theoretical perspectives: The theoretical background of this study is established from the theories surrounding payout policies and corporate governance issues. These theoretical propositions have been analyzed in relation to our chosen topic. Empirical foundation: The sample consists of annual data of firms listed on the main market from 2012 to 2019. Conclusion: We find no statistical significance that dual-class firms have higher dividend payout ratios than single-class firms. However, we find statistical significance that dual-class shares have a higher proportion of cash dividends to total payouts than single-class shares. The results are robust after controlling against a propensity score matched sample.