Download or read book The Relationship between Ownership Structure and Corporate Dividend Policy Evidence from the Athens Stock Exchange written by George Karathanassis and published by . This book was released on 2006 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt: Over the past decades extensive research has been carried out regarding the relative importance of the factors determining corporate dividend policy. The large amount of net earnings distributed to shareholders in the form of dividends trouble researchers since in free and competitive markets dividends should, affect fundamentally market values. Moreover, if one takes into account the fact that in many countries dividends are taxed more heavily than retained earnings decisions to adopt liberal dividend policies appears to be a puzzle.The dividend puzzle has been attributed to the existence of capital market imperfections such as the presence of information asymmetries between managers and shareholders.There is ample evidence that corporate dividend policy is used by management for informational reasons and is functioning effectively as a signal for the firm's future prospects.The paper examines the explanatory power of three alternative models of dividend policy, the full adjustment and partial adjustment models and the earnings trend model modified in order to incorporate factors representing ownership by institutional investors and managers.The sample considered of 55 Greek firms the shares of which were quoted on the Athens Stock Exchange which were observed for a number of years. A number of assumptions were made regarding the properties of time-series and cross-section unobservable effects and using appropriate estimating techniques.The empirical finding appear to be in accordance with the efficient monitoring hypothesis but reject the hypothesis of strategic alignments.

Download or read book Ownership Structure and Dividend Policy written by Yordying Thanatawee and published by . This book was released on 2014 with total page 8 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the impact of ownership structure on dividend policies of listed companies in the Shanghai Stock Exchange over the period 2007-2011. The results show that firms with higher ownership by the largest shareholder, ownership concentration, and government ownership are more likely to pay dividends. However, the probability of paying dividends decreases when institutions hold more shares. It is also found that the magnitude of dividend payouts has a positive relationship with the ownership by the largest shareholder, ownership concentration, and government ownership but a negative relationship with the ownership by institutions and foreign investors.

Download or read book Dividend Policy and Corporate Governance written by Luis Correia da Silva and published by OUP Oxford. This book was released on 2004-02-26 with total page 204 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dividends are not only a signal about a firm's prospects under asymmetric information, but they can also act as a corporate governance device to align the management's interests with those of the shareholders. Dividend Policy and Corporate Governance is the first comprehensive volume on the relationship between dividend policy and corporate governance, and examines in detail empirical studies and current theories.Reviewing the interactions between dividend policy and other corporate governance mechanisms, it compares results for the UK and the US with those for other countries such as France, Germany, and Japan, and provides new empirical evidence on corporate governance in continental Europe and its impact on dividends. Focusing on one of the main representatives of this system, Germany, it highlights major differences between the dividend policies of German firms and those of UK or US firms.Conventional wisdom states that German dividends are lower than UK or US dividends, yet on a published-profits basis the exact converse is true. In addition, the authors demonstrate a link between corporate control structures and dividend payouts, report evidence that the existence of a loss is an additionaldeterminant of dividend changes, and demonstrate that the tax status of the controlling shareholder and the firm's dividend payout are not linked.The conclusions reached in this book have important implications for the current debate on corporate governance, making it invaluable for academics, finance professionals, regulators, and legal advisors.

Download or read book Ownership Structure and Dividend Payout Policy in India written by Jayesh Kumar and published by . This book was released on 2012 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the possible association between ownership structure, corporate governance and firm's dividend payout policy. It is also one of the very first examples, which tries to detect any potential association in ownership structure, corporate governance and well-established dividend payout models in context of an emerging market (India). The present study examines the payout behavior of dividends and the association of ownership structure for Indian corporate firms over the period 1994-2000 and attempts to explain the observed behavior with the help of well established dividend models of Linter (1956), Waud (1966), and Fama and Babiak (1968). The results consistently support the potential association between ownership structure and dividend payout policy. Though the relationship differs across different group of owners and at different level of shareholding.Furthermore, we suggest a more generalized model to explain the dividend payout intensity, incorporating firm's financial structure and investments opportunities along with dividends and earnings trend and ownership structure, after controlling for firm's unobserved heterogeneity. We also find evidence of dividends dependence on past dividends after controlling for unobserved firm heterogeneity. We find evidence in support of the hypothesis that a positive association exists between dividends and earnings trend. Debt equity is found to be negative and associated, whereas past investment opportunities are positive and associated with dividends in some cases. Corporate and directors ownership is positive and related in level, and corporate ownership is negative and related in square. Institutional ownership has inverse effects on dividends in comparison to corporate ownership in levels, as well as in its squares. We find no evidence in favor of association between foreign ownership and divided payout growth.

Download or read book The Structure of Ownership and Cash Flows as Determinants of Corporate Dividend Policy written by Sarfaraz Bhutto and published by . This book was released on 2015 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dividend Policy is among the widely addressed topics in modern financial literature. The inconclusiveness of the theories on importance of dividend in determining firm's value has made it one of the most debatable topics for the researchers (see for example, Ramcharan, 2010; Frankfurter et.al 2011; Al-Malkawi, 2014).The present study investigates the impact of firm specific characteristics on corporate dividend behavior in emerging economy of Pakistan. Three years data (2012-2015) of 100 companies listed at Karachi Stock Exchange (KSE) has been analyzed using Ordinary Least Square (OLS) regression. The results show that managerial and individual ownership, cash flow sensitivity, size and leverage are negatively whereas, operating cash-flow and profitability are positively related to cash dividend. Managerial ownership, individual ownership, operating cash flow and size are the most significant determinants of dividend behavior whereas, leverage and cash flow sensitivity do not contribute significantly in determining the level of corporate dividend payment in the firms studied in our sample. Estimated results are robust to alternative proxy of dividend behavior i.e. dividend intensity.

Download or read book Dividend Policy Decisions and Ownership Concentration written by J. Thomas Connelly and published by . This book was released on 2019 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper we examine the relationship between ownership concentration and dividend policy for Thai publicly listed companies. High family ownership firms have higher dividend payouts than low family ownership firms, which we interpret to mean high family ownership firms follow a more rational dividend policy. This finding is consistent with the prediction that agency conflicts between the managers and shareholders are lower at firms with a controlling shareholder. The evidence is robust through different econometric specifications, robust when the level used to determine the extent of family ownership (family control) is lowered to 10 percent of the outstanding shares, and robust to the inclusion of the ownership wedge as a proxy for the severity of agency conflicts.

Download or read book Impact of Ownership Structure on Dividend Policy and Capital Structure written by Jan Khan and published by . This book was released on 2016 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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 two-way relationship between these two strategic decisions.

Download or read book Share Ownership and Corporate Performance written by Jayesh Kumar and published by Independently Published. This book was released on 2021-03-07 with total page 116 pages. Available in PDF, EPUB and Kindle. Book excerpt: This MPhil thesis examines whether the corporate governance framework (ownership structure) influence the firm performance and dividends payout policy. We consider the effect of interactions between corporate, foreign, institutional, and managerial ownership on the firm performance and profits payout policy for an unbalanced panel of 2478 Indian corporate firms over 1994 to 2000.We find that after controlling for observed firm characteristics and unobserved firm heterogeneity, using a fixed-effects panel data framework, the shareholding by institutional investors and directors affects firm performance. We also find that the equity ownership by dominant group influences firm-performance only in case of managerial ownership. We find no evidence in favor of the endogeneity of ownership structure. Unobserved firm heterogeneity is found to be significant. We also find that the ownership by foreign and corporates does not influence firm performance.In analyzing the dividends payout behavior, we suggest an empirical model explain the dividend payout behavior, with the help of a firm's financial structure and investment opportunities along with dividends, earnings, and ownership structure. Using a fixed-effects panel data approach, we find evidence of dividends' dependence on past dividends. Ownership by the corporate and directors is positively related to profits payout in level, and corporate ownership is negatively related in its square. Institutional ownership has an inverse effect on dividends in comparison to corporate ownership in standards as well as in its squares.We find no evidence in favor of an association between foreign ownership and dividend payout growth. We also find support for the hypothesis of a positive association between dividends and past earnings. Debt equity is found to be negatively associated, whereas recent investment opportunities are positively associated with dividends payout. We do not find evidence of the tax or group affiliation effect on payout policy.

Download or read book Ownership Structure and Dividend Policy written by Hammad Hassan Mirza and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Cash dividend is among the most important sources of cash flow for the shareholders through which they gauge firm's performance. Corporate managers also use dividends to signal company's financial strength to attract potential investors. Empirical findings on determinants of dividend policy provide mixed and inconclusive results which has made the whole issue a “puzzle” as described by Black (1976), whose pieces do not fit together. Allen et. al. (2000) argued the dividend problem as one of the thorniest puzzles in corporate finance. The present study investigates the relationship between managers' ownership and dividend policy in emerging economies of South Asia. The data of listed non-financial companies is collected from Bangladesh, India, Pakistan and Sri Lanka and analyzed with least square and Tobit regression models during the period 2006-2010. It is found that managers' ownership is significantly and positively related with dividend payout in Bangladesh and India but negatively related in Pakistan and Sri Lanka.

Download or read book Corporate Governance and Dividend Policy When Investor Protection Is Weak written by Morad Abdel-Halim and published by . This book was released on 2014 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate the relationship between firm's dividend policy and the corporate governance mechanism, measured by firm's ownership structure, in an emerging market characterized by weak corporate governance system and ineffective law enforcement. Evidence is drawn from non financial corporations over the period 2004-2008 using several econometric models with different specifications that account for firm-specific unobservable variables. We find a significant negative relationship between firm's dividend payout ratio and its percentage of capital owned by blockholders. This result implies that large shareholders are either expropriating the rights of minority shareholders or that firm's earnings are being used to finance its future investments. Our results support the first implication as we find that the negative impact of large shareholders' capital stake on dividend payments is robust and unchanged when firm's sales growth is controlled for.

Download or read book Ownership Structure Board Composition and Dividend Policies Evidence from Saudi Arabia written by Mohammed Soliman and published by . This book was released on 2013 with total page 18 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book Company Dividends and Ownership Structure written by Tehmina S. Khan and published by . This book was released on 2006 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the relationship between dividends and ownership structure for a panel of 330 large quoted UK firms. Controlling for unobserved firm-specific effects, results indicate a negative relationship between dividends and ownership concentration. Ownership composition also matters, with a positive relationship observed for shareholding by insurance companies, and a negative one for individuals. These results are consistent with agency models in which dividends substitute for poor monitoring by a firm's shareholders but can also be explained by the presence of powerful principals who are able to impose their preferred payout policy upon firms.

Download or read book The Relationship Between Ownership Structure and Corporate Performance written by Hao Liu (M.Fin.) and published by . This book was released on 2013 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Dividend Policy Ownership Structure and Corporate Governance written by Amitava Roy and published by . This book was released on 2016 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this article, we investigate the possible association between the firm's ownership structure and dividend policy and whether the corporate governance (CG) practices adopted by the firm have any impact on dividend policy. In India the presence of family-run firms, with concentrated ownership, is a reality and we try to understand whether such firms have any significantly different approach to dividend policy compared to non-family-run companies. The use of debt by firms in their capital structure acts as an additional monitoring mechanism and we propose to analyse whether this has any impact on dividend policy. We explore the determinants of dividend policy of Indian firms. Thus, firm characteristics which seem to have an impact on dividend policy, like profitability, liquidity, growth, income volatility, size and age are investigated. We use a panel of 51 top Indian listed firms, in terms of market capitalisation (BSE 100 and NSE 100), over the 5-year period from 2007-2008 to 2011-2012 for our analysis. We conclude that the CG variables, namely, board size, independent directors and the proportion of non-executive directors on the board have significant impact on the dividend policy of the firm. The proportion of cash and cash equivalent to total asset, used as a measure of firm liquidity, also has an influence on the dividend policy. Growth opportunities have a positive influence on the dividend policy of firms.

Download or read book Dividends Policy and Ownership Structure in China written by Weiguo Zhang and published by . This book was released on 2004 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, using 3,994 observations of China listed firms between the years 1995 and 2001 as a sample, we find that there is a significantly positive correlation between the state ownership and cash dividends, and a significantly negative correlation between the public ownership and stock dividends. In particular, we find that the relation between dividends policy and ownership structure is nonlinear. The higher the state ownership, the higher cash dividends rates. The higher the public ownership, the higher stock dividends rates. We conclude that the managers of China listed companies are likely to cater for the preference of different shareholders.

Download or read book Dividend Policy Corporate Governance and the Managerial Entrenchment Hypothesis written by Jorge Farinha and published by . This book was released on 2002 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyses the agency explanation for the cross-sectional variation of corporate dividend policy in the UK by looking at the managerial entrenchment hypothesis drawn from the agency literature. The agency perspective of dividends asserts that cash payments to shareholders may help to reduce agency problems either by increasing the frequency of external capital raising and associated monitoring by investment bankers and investors (Easterbrook, 1984), or by eliminating free cash-flow (Jensen, 1986). Although other theories have been proposed to explain cross-sectional dividend policy (notably those based on signalling and tax clienteles), the existing empirical literature typically finds that the observed dividend behaviour is consistent with more than a single theory, and therefore usually fails to dismiss alternative explanations. However, the managerial entrenchment hypothesis taken from the agency literature offers a distinctive set of predictions that cannot be found in other competing stories for the explanation of cross-sectional dividend policy behaviour. Consistent with such hypothesis, this paper, using a large (exceeding 600 firms) sample of UK firms and two distinct periods, finds evidence of a strong U-shaped relationship between dividend payouts and insider ownership in the UK. Specifically, these findings show that after a critical entrenchment level estimated in the region of 30%, the coefficient of insider ownership changes from negative to positive. These results strongly suggest the possibility of managerial entrenchment when insider ownership reaches a threshold of around 30%. Evidence is also presented that non-beneficial holdings by insiders (i.e., shares held by insiders on behalf of third parties) can lead to entrenchment in conjunction with shares held beneficially.

Download or read book Corporate Governance and Dividend Policy written by Julian Atanassov and published by . This book was released on 2019 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a sample of 85 Delaware master limited partnerships (“MLPs”) from 2004 to 2016, we examine the relation between cash dividend policy and the strength of corporate governance measured by contractual governance provisions, such as fiduciary waiver, mandatory distributions, and voting rights, and by ownership structure. We find support for the tunneling model of dividend determination. Specifically, we document that firms with weaker governance pay out more cash dividends than better governed firms. We also find that, in the presence of low quality governance, these payments reduce firm value as well as the value of the firm's cash holdings, suggesting that they are viewed by the market as a tunneling (extraction) of resources by the general partner at the expense of limited unitholders.