Creative Commons

This dissertation was written as part of the MSc in International Accounting Auditing & Financial Management at the International Hellenic University. The purpose of this dissertation is to examine the nonlinear relation between the level of founding family ownership of companies in Greece with the dividend pay-out decisions they follow. Furthermore, it is going to be examined how a financial distress situation influences the association between family ownership and dividend payouts. At a theoretical level, a reference is going to be made regarding the two arguments that can be put forward to explain the dividend policies of family-controlled firms: the alignment effect and the entrenchment effect. The aim of the study is to investigate the effect of family ownership on dividend policy and prove that the relation between family ownership and dividend policy is not monotonic but effectively varies by ownership levels. Furthermore, a reference is going to be made to the agency theory view of dividend policy, the managerial entrenchment hypothesis and to the institutional framework regarding the dividend requirement legal setting in Greece.