Purpose-The purpose of this paper is to empirically analyze the motive of family-controlled firms to pay cash dividends in China.Design/methodology/approach-Using some econometrical models,the paper designs and conducts a series of empirical research on cash dividends behavior,thus acquiring credible empirical data.Findings-Using a sample of 204 family firms,the motive of family-controlled firms to pay cash dividends was investigated.Dividend ratio was found to decrease with the separation of ultimate ownership and control right;this may reflect the tunneling motive of the family owners.Different from others,it was also found that high-growth firms pay more dividends and that the family doing so may want to build a high reputation for the friendly treatment of minority investors for future financing.Practical implications-The paper discusses investor protection matters in China.Originality/value-The paper'findings provide policy implications for corporate governance reform and capital market development in China.
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