Two models of family firms in dividends and investments policy

Abstract

The purpose of our research is to verify the role of the family variable in the dividends policy and investments one, distinguishing family firms (FFs) and non-family firms (NFFs) and between large FFs (FFs listed in FTSE MIB index) and medium-sized FFs (FFs listed in STAR index), in terms of dividends and investments policies adopted. Medium-sized FFs have a weaker dividends distribution policy than large FFs, due to a high interest in saving the liquidity in order to finance the attractive investment opportunities. Large FFs are interested in a stronger dividends policy, in order to attract new shareholders and reward the old ones, more than with large NFFs. FFs have a stronger investments policy compared with NFFs and this difference is more evident in medium-sized companies. The medium-sized FF can take advantage of the power of the family to maintain a continuous growth and development of the business, even when liquidity is restricted.