Dividend Policies of Privately Held Companies: Stand-Alone and Group Companies in Belgium


  • We are grateful to an anonymous referee, Wolfgang Drobetz, Livia Ghita, Marc Jegers, Rez Kabir, Eddy Laveren, Sophie Manigart, Philippe Van Cauwenberge, Cynthia Van Hulle, and participants at the FMA European meeting in Turin and the Belgian Financial Research Forum in Ghent for valuable comments and suggestions. Financial support from the Fund for Scientific Research Flanders (Belgium) is gratefully acknowledged. Correspondence: Marc Deloof


This study examines the dividend policies of privately held Belgian companies, differentiating between stand-alone companies and those affiliated with a business group. We find that privately held companies typically do not pay dividends. Compared to public companies, they are less likely to pay dividends and they have lower dividend payouts. Our results also suggest that group companies pay more dividends than stand-alone companies, consistent with the hypothesis that tax-exempt group firms redistribute dividend payments on the group's internal capital market. Group companies pay higher dividends if they have minority shareholders.