Abstract:

The current study investigates the speed toward target capital structure and dividend policy of family owned business (FOB) versus non-family owned Business (NFOB). For the identification of FOBs from NFOBs, two threshold levels of ownership (25% & 50%) were applied. For this purpose, panel data ranging from the period of 2002 to 2013, a sample of 280 listed firms at Karachi Stock Exchange (KSE) were used. Among many the generalized method of moments (GMM) was found appropriate as an analytical technique. The result drawn through GMM indicated that FOBs rebalance their target capital structure with higher average speed (38.70%) than NFOBs. However, the average speeds toward target dividend ratio were (63.05% & 71.05%) for FOBs and NFOBs.