Corporate governance revisited: Exploring the effect of family control on dividend policy in the Moroccan context

Résumé

Our study is designed to grasp the effect of family control on dividend policy of Moroccan listed firms by using longitudinal data spanning the period (2019-2023). Our results indicate and confirm the main hypothesis that family control has a negative significant impact on dividend payout in the Moroccan context. Regarding corporate governance variables, ownership concentration, board size, independence and CEO duality are determinants of dividend payout, while board gender diversity failed to record statistical significance. Additionally, the vast majority of control variables demonstrate significant impacts in the expected sign except for external audit quality and growth opportunities. For robustness checks, we use Feasible Generalized Least Squares (FGLS) estimator to deal with potential issues related to heteroscedasticity, moreover, we investigate the decision to pay dividends by using probit and logistic regression models. Regarding research limitations, we can state that our proxy of family control could be replaced by the percentage of ownership held by family members in order to stress the importance of addressing the non-linearity effect. Another limitation is related to the sample size; indeed, it is worth noting that the interpretation of our results should be done with caution. For research avenues, we suggest that future studies should consider the moderating effect of agency costs of free cash flow, growth opportunities, financial constraints, R&D investment expenditures and extend the sample by including other countries belonging to the MENA region in order to ensure the robustness of the empirical results.