ERBE 05 2 04
Managerial Ownership and Dividend Policy During Covid-19: Evidence from Euro Stoxx 50 Firms
RITA FERREIRA a, VÍTOR RIBEIRO a, JORGE FARINHA 
a,b,*
a Faculdade de Economia, University of Porto, Porto, Portugal, b Faculdade de Economia, University of Porto, Porto, Portugal.
b Center for Economics and Finance (CEF- UP), University of Porto, Porto, Portugal
* Corresponding author: jfarinha@fep.up.pt
To cite this article:
To cite this article: Rita Ferreira, Ribeiro, V., Farinha, J. 2026. Managerial Ownership and Dividend Policy During Covid-19: Evidence from Euro Stoxx 50 Firms, European Review of Business Economics V(2): 73-98.
DOI: https://doi.org/10.26619/ERBE-2026.5.2.4
Received: 8 May 2026. Accepted: 30 June 2026. Published: 30 June 2026.
Language: English
Abstract
This study examines how managerial ownership affects dividend policy among large European listed firms and whether this relationship changed during the Covid-19 pandemic. Drawing on agency theory and the view that dividends and ownership may function as substitute or complementary governance mechanisms, we analyse a panel of 38 non-financial Euro Stoxx 50 firms over 2013–2023 using instrumental-variable and panel regressions with firm- and year-level controls. The results show a positive and statistically significant association between managerial ownership and dividend payouts. This effect is stronger at lower levels of managerial ownership and does not support the non-monotonic relationship predicted by entrenchment theories for the full sample, although industry-level analyses suggest some heterogeneity. Covid-19 had no direct effect on dividend payouts but strengthened the positive association between managerial ownership and dividends, a finding robust to alternative definitions of the pandemic period. These results suggest that managerial ownership and dividends operate primarily as complementary governance mechanisms in large European blue-chip firms, particularly during periods of uncertainty. The study contributes to the ownership-dividend literature by providing evidence from a European civil-law setting and by documenting how this governance relationship evolved during the Covid-19 shock. An external validity analysis confirms the robustness of the positive ownership-dividend relationship.
Keywords
Managerial ownership, Dividend policy, Corporate governance, Agency theory, Covid-19, Euro Stoxx 50.
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