| Summary: | This study has two objectives. First, it compares the dividend payouts of family firms and non-family firms for two specific periods, before and after the implementation of a single tier tax system (STT) in Malaysia. Second, it examines the relationship between family firms and dividend payouts. Using 483 firm-year observations, this study suggests that family firms pay lower dividends than non-family firms during both periods. In addition, the mean value of dividends paid by family firms decreased after the implementation of STT. It is also evident that a negative relationship exists between family firms and dividend payouts; family firms are less likely to pay dividends that non-family firms. A few unique characteristics of family firms, such as long-term investment orientations, smaller company size and greater dependence on leverage, may result in family firms retaining their cash rather than declaring dividends. Copyright @ 2017, Mohammad Safa.
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