the effect of ownership structure on dividend policy (original) (raw)
Related papers
The Effect of Ownership Structure on Dividend Policy in Jordan
Zenodo (CERN European Organization for Nuclear Research), 2022
The current research explores the ownership structure's impact on the dividend policy from a Jordanian perspective. Above all, using data from industrial companies indexed on Amman Stock Exchange (ASE) between 2017 and 2021, the study reveals the impact of these concepts "Institutional ownership, foreign ownership, and managerial ownership" on dividend decisions. Confirmation of a positive relationship between institutional ownership and the probability of paying dividends is provided. Furthermore, the findings show a negative relationship between foreign ownership and paying dividends. Besides, the findings demonstrate that managerial ownership does not impact dividend payment decisions. The study, however, recommends taking into account the ownership structure among investors when investment decisions are made to assist them in selecting the appropriate investment opportunities.
Abstract This study aims to determine whether ownership structure is linked to the dividend policy on industrial companies are listed in ASE. The study sample consisted of sixty two industrial firms listed in ASE from (2000-2006).In order to achieve the objective of the study, annually dividend and annual report publications of public shareholding firms held by ASE. The Tobit model or censored regression model specification was used to test the study hypotheses for the level of dividends paid. The study was found more than half (55%) of the firm observation in our sample have zero dividends. Results shows that ownership dispersion as measured by the natural log of the number of stockholders (STOCK) seems to be not related to dividend policy in Jordan since it was insignificant in both analyses, Tobit and OLS. The fraction held by insiders (INSD), has negative impact on the level of dividends paid. The other ownership, family is negatively but not significantly, and institution is positively and significant influence on the dividend policy, the multiple ownership is negative and insignificant, the finally variable for ownership is foreigner positive and insignificant.
Corporate Governance and Dividend Policy in Jordan
This study investigates the relationship between corporate governance and dividend policy in Jordan using a sample of 47 industrial company listed in Amman Stock Exchange (ASE) during the period 2005–2011. The results show that large firms with high investment opportunity set (growth) and high return on equity make large dividend payment, but firms with high financial leverage degree make lesser dividend payment. The random regression wasused to test the relationship between the corporate governance factors (corporate holdings, financial institution holdings, insiders holding and foreign holding) and dividend yield. The corporate holdings and financial institution holdings have a nonlinear relationship with dividend yields, as holdings increase the dividend yields increase up to a certain level of holdings supporting the free cash flow theory, as the insiders and foreign holdings increase the dividend yields decrease supporting the signaling theory.
Research Journal of Finance and Accounting, 2014
Based on the Agency literature, on the one hand, cash dividends paid to shareholders reduce free cash flows and reduce the risk of investment in non-optimal investing projects, and on the other hand, increase constant control on managers by capital markets. Accordingly, interest payments as a policy maker-works to reduce conflict of interest. Hence, this study is about the survey of effect of mechanisms of Corporate Governance on the dividend policy of the companies accepted by the Tehran Stock Exchange. Four hypotheses represented to test this effect. The population of this study involves all listed companies of the Tehran Stock Exchange. Taking consideration the limitations of the sample of the present study, 71 companies selected as the sample of this study. The present study discusses mentioned companies from 2009 to 2013. The methodology of this study involves using the past information. Using statistical methods ,regression analysis using combined data by fixed-effects. The obtained results of this study are indicative that is not a meaningful relation between the mechanisms of Corporate Governance and the rate of dividend.
The Impact Of Ownership Structure On Dividend Policy: Evidence From Listed Companies In Sri Lanka
6th Annual International Conference on Qualitative and Quantitative Economics Research (QQE 2016), 2016
This study primarily investigates the impact of ownership structure on capital structure and dividend policy in Pakistan. Data is drawn from 50 non-financial companies included in KSE 100 Index for the period 2006 to 2014. In this study leverage and dividend payout are used as dependent variables, while managerial ownership and institutional ownership are explanatory variables. Profitability, sales growth and size of firm are used as control variables. Results of this study reveal that institutional ownership has significant and negative impact on capital structure but significant and positive impact on dividend payout ratio. On the other hand results suggest that managerial ownership negatively affects dividend payout ratio. Moreover results reveal that both of these strategic decisions affect each other negatively. Most of the researchers in Pakistan analyzed the impact of ownership structure on these two strategic decisions separately. But in this study, an advanced empirical technique-two stage least square (2SLS)-is used to find out the impact of ownership structure on both of these strategic decisions (Capital structure and Dividend policy). This technique also helps to determine the twoway relationship between these two strategic decisions.
Ownership structure, board composition, and dividend policies Evidence from Saudi Arabia
The opinions about the relative importance of different determinants of corporate dividend policies vary across both scholars and financial mangers. This study seeks to examine the effect of ownership structure and board of directors' composition on dividend policies in Saudi Arabia, using pooled cross-sectional observations from the listed Saudi firms for three years between 2006 and 2008. It is found that there is a significant positive association between institutional ownership, board size, firm performance, and both dividend decision and payout ratio. The results confirm that firms with higher earnings per share and a higher institutional ownership distribute higher levels of dividend. No significant association was found between other board composition factors and dividend decisions or ratios.
Dividend Policy and Corporate Governance in Saudi Stock Market: Outcome Model or Substitute Model?
Corporate Ownership and Control, 2015
Theories suggest that corporate governance mechanisms affect corporate dividend policies. This study extends and tests the implications of two extant static agency models making opposite predictions. The outcome model predicts an increase in dividends when the corporate governance mechanisms improve, because shareholders are better able to force managers to disgorge cash. In contrast, the substitute model suggests that an improvement in the corporate governance mechanisms reduces the role of dividends in controlling agency costs, leading to a decrease in dividends. This paper investigates the dividend policy for firms listed on Saudi Arabia Stock Exchange. This is a case study of Saudi Stock Market, where the determinants of dividend policy have received little attention. This study use a panel dataset of non-financial firms listed on Saudi Arabia Stock Exchange between the years of 2007 and 2010. Based on a panel of 366 firm year observations of 99 Saudi firms, we provide evidence ...
Impact of Ownership Sturcture on Dividend Policy of Firm
ipedr.net
This study has been conducted to find out the impact of ownership structure on dividend payout behavior of firms. Data has been analyzed for the period of 2002 to 2006. We have used panel data of Pakistani firms listed at Karachi stock exchange to explain the relationship. Common Effect Model has been applied as a research tool and the results have shown a positive relationship between ownership structures and dividend policy. The results have also consistently supported the potential association between ownership structure and dividend payout policy.
Effect of Institutional and Insider Ownership on Dividend Policy: Evidence from Pakistan
Journal of Business & Tourism, 2021
This research study aimed to examine the effect of institutional and insider ownership on dividend policy of a firm. Ownership structure play a vital role in explaining firm dividend policy. To investigate the effect of institutional and insider ownership on dividend policy, a random sample of 50 non-financial firms was selected for the period of 2009 to 2013. The study based on panel data so for the selection of appropriate panel data model among pooled OLS, Random effect and Fixed effect, Breusch Pagan LM test, Chow test, and Hausman test were used and random effect model was found best fitted. Results indicated that institutional ownership has positive relationship while insider ownership has negative relationship with dividend payout. Further, inclusion of institutional ownership along with insider ownership has increased the explanatory power of the model by 5.56% which is the incremental effect of the institutional ownership. Moreover, free cash flows and leverage have negativ...
The purpose of this article is to examine the interrelationship between managerial ownership, debt and dividend policy. The analysis is done using a simultaneous equation on a sample of 80 anonymous Tunisian companies during the period 2010-2014. The empirical results indicate that management ownership has a negative and no significant relationship with debt. This finding is contradicted by the Agency Theory. In addition, the results provide strong support for the Pecking Order Theory, suggesting a negative relationship between debt and dividend policy. However, the relationship between managerial ownership and dividend policy is positive and significant, which means that companies with a high level of executive ownership consciously choose a high level of dividends.