Degree Name

Doctor of Philosophy


School of Accounting, Economics and Finance, Faculty of Business


Ever since the 1997 Asian financial crisis which originated in Thailand, corporate governance has captured the world’s attention, particularly in Thailand and other emerging economies. This thesis contributes to the empirical evidence of ownership structure and concentration from a governance perspective. Specifically, the thesis explores the manner by which family control and institutional environment influence corporate decision-making and other stakeholders. Focusing on Thailand’s financial market, the thesis identifies different key dimensions of family control and undertakes three studies regarding: (i) the relationship between family control and dividend payment; (ii) the effect of family control on the cost of debt; and (iii) the association between family ownership and firm value during times of political uncertainty.

Prior studies mainly focus on the family control-financial performance relationship yet little is known about the channels through which controlling families affect firm performance, particularly in emerging markets, which are characterized by weak legal systems and poor corporate governance regulations. To better understand this relationship, the first study examines the impact of family control on dividend payment. Agency theory suggests that controlling families’ tendency to expropriate minority shareholders can lead to inefficient use of free cash flow by reducing dividend payment. The results show that family firms significantly pay lower dividends than non-family firms. The effects are more pronounced when controlling families exert greater ownership and have family members on the company boards. The effect of family control on dividend payment also varies according to corporate governance mechanisms; lower wedge and less free cash flow lead to higher dividend payment in family firms. Based on an exogenous political event in Thailand, we address the endogeneity concerns that exist between family control and dividend payment, and find that the negative relationship between family control and dividend payment increases in times of political uncertainty. This is due to the rent-seeking behavior related to establishing connections with new politicians and/or their parties. Those findings support the view that families are more likely to expropriate resources from their companies in emerging markets due to the weak institutional and regulatory environments, and poor investor protection systems in place.



Unless otherwise indicated, the views expressed in this thesis are those of the author and do not necessarily represent the views of the University of Wollongong.