Ownership concentration and dividend policy in Japan

2011 ◽  
Vol 37 (4) ◽  
pp. 362-379 ◽  
Author(s):  
Kimie Harada ◽  
Pascal Nguyen
Keyword(s):  
Dividend Policy ◽  
Ownership Concentration

scholarly journals Ownership Structure and Dividend Policy of Listed Deposit Money Banks in Nigeria: A Tobit Regression Analysis

2016 ◽  
Vol 6 (1) ◽  
pp. 1 ◽  
Author(s):  
Idris Ibrahim ◽  
Hussaini Shuaibu
Keyword(s):  
Ownership Structure ◽  
Dividend Policy ◽  
Institutional Ownership ◽  
Free Cash Flow ◽  
Ownership Concentration ◽  
Managerial Ownership ◽  
Tobit Regression ◽  
Diverse Range ◽  
Dividend Payment ◽  
Ex Post

Free cash flow hypothesis posit that regular paying of dividend can reduce agency conflict and through this, the range of future probable misuse of resources by management reduces. Ownership structure has been identified to have relationship with dividend policy of a firm.  Though the relationship is different for different class of owners and at different level; it does not influence dividend policy uniformly. Although, the linkage between the two has been monitored by many researchers, yet empirical researches do not provide consensus as to the direction of the relationships. Thus, the paper investigates the likelihood impact of ownership structure on dividend policy in the context of agency relation while using managerial ownership, institutional ownership, ownership concentration and foreign ownershipon dividend policy in the listed Deposit Money Banks (DMBs)in Nigeria. The research designs are Correlational and ex-post facto using secondary data extracted from the sampled companies’ annual financial reports for the period 2010-2014. Maximum likelihood (panel data tobit regression) is adopted as a technique of analysis for the study, using a sample of ten (10) out of seventeen (17) listed DMBs in Nigeria that served as population. The result shows that managerial ownership and ownership concentration are likely to have significant negative impact on dividend policy of listed DMBsin Nigeria, while institutional ownership is found to have likely significant positive impact on dividend policy of listed DMBs in Nigeria. But foreign ownership is found not to have likely significant impact on dividend policyof listed DMBsin Nigeria. Based on the findings, it is recommended among others that policy makers (Security and Exchange Commission and Corporate Affairs Commission) to design future policies where dividend payment could be facilitated and the diverse range of shareholders to be satisfied most especially minority shareholders. And that a limit should be set for managers on the proportion of shares to be held as this can facilitate dividend payment.

scholarly journals Dividend policy and corporate governance in Saudi stock market: Outcome model or substitute model?

2015 ◽  
Vol 12 (2) ◽  
pp. 74-91 ◽  
Author(s):  
Amina Hamdouni
Keyword(s):  
Corporate Governance ◽  
Cash Flow ◽  
Dividend Policy ◽  
Good Governance ◽  
Free Cash Flow ◽  
Ownership Concentration ◽  
Board Structure ◽  
Governance Mechanisms ◽  
Corporate Governance Mechanisms ◽  
Debt Policy

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 in outcome model or substitute model with ownership structure, board structure and debt policy. Three Tobit models are specified: In the first, we construct a governance index based on eight criteria: seven criteria which capture various aspects of a firm’s structure, policies and practices that constitute good governance and a criterion that examines the company’s compliance with Shariah law in all its activities. Therefore, we estimate the effect of corporate governance on dividend policy in the first model. In the second, we investigate how dividends interact with corporate governance mechanisms in a panel of data. We explore the relation between dividends and ownership structure (ownership concentration and managerial ownership), board structure (board size, Board independence and Chairman-CEO duality) and debt policy. In the final, another test of the substitute and the outcome models is built on the Jensen (1986) free cash flow theory, which states that dividend policy can extract surplus cash from management control by reducing free cash flow. In this third model, we examine how corporate governance improvements affect the dividends’ sensitivity to free cash flows by focusing on the coefficients on the interactive variables of the ownership structure, board structure, debt policy and the free cash flow. For the three models, we divide sample in two subsamples and we compare the results obtained by using criteria of company’s compliance with Shariah law. For the effects of corporate governance (measured by corporate governance score) on dividend levels, we find that dividend policy is a substitute model for good governance for all Saudi Arabia firms. When we select only Shariah compliant firms, results indicate also that dividend policy is a substitute model for good governance but results are insignificant. When we select only Non-Shariah compliant firms, results indicate the same conclusion. We find that governance is associated with fewer dividends, supporting the substitute model and indicating the influence of good governance by forcing less cash to be returned to investors. For the effects of corporate governance mechanisms on dividend levels, we find that the only variable affect the dividend levels for Non-Shariah compliant firms is the separation in the functions of chairman and of CEO supporting the substitute model. For Shariah compliant firms, dividend policy is an outcome for the separation in the functions of chairman and of CEO, and ownership concentration. Governance through the separation in the functions of chairman and of CEO and ownership concentration influences firms by forcing more cash to be returned to investors. For the effects of the corporate governance improvements on dividends’ sensitivity to free cash flow, our results support the substitute hypothesis for Shariah compliant firms regardless the board independence, board meeting, managerial ownership and debt. Improvements in these corporate governance mechanisms reduce firms’ need to force out the free cash flow through dividends. For Non-Shariah compliant firms, our results support the outcome model for managerial ownership and ownership concentration

scholarly journals Does Ownership Concentration Affect Profitability and Dividend Policy? Evidence from Listed Banks in Jordan

2021 ◽  
Vol 18 ◽  
pp. 1019-1027
Author(s):  
Ahmad Dahiyat ◽  
Esra Al-Nsour
Keyword(s):  
Dividend Policy ◽  
Investment Decisions ◽  
Ownership Concentration ◽  
Agency Conflicts ◽  
Return On Equity ◽  
Controlling Shareholders ◽  
Large Shareholders ◽  
Simple Regression

This paper examines how the ownership concentration affects banks’ profitability and dividend policy in Jordan. All banks listed on the Amman Exchange were selected (16 banks) over the period 2010 to 2019. Ownership concentration was defined as the percentage of ownership that equals or exceeds 5%, while profitability was defined by return on equity; dividend policy was defined by the pay-out ratio. Simple regression was utilized to examine the effect; the result revealed that ownership concentration has a positive significant impact on profitability, which means that banks with higher ownership concentration have better profitability, this result justified by the view of the power that controlling shareholders can greatly use to require management to make decisions that improve the performance. The finding showed a negative significant impact on dividend policy, which indicates that the existence of large shareholders can reduce agency conflicts; and maximize the wealth of the company. It is recommended that related parties especially investors should take the concentration of ownership as an important factor to take their investment decisions, whether related to purchasing banks’ shares for various purposes, or expectations of potential dividends.

scholarly journals OWNERSHIP STRUCTURES AND DIVIDEND POLICY IN MANUFACTURING COMPANIES IN INDONESIA

2019 ◽  
Vol 1 (1) ◽  
pp. 1
Author(s):  
Ida Setya Dwi Jayanti ◽  
Ayu Febriyanti Puspitasari
Keyword(s):  
Cash Flow ◽  
Significant Influence ◽  
Dividend Policy ◽  
Control Variable ◽  
Institutional Ownership ◽  
Foreign Ownership ◽  
Free Cash Flow ◽  
Ownership Concentration ◽  
Managerial Ownership ◽  
Manufacturing Companies

This study aims at examining the influence of ownership structure on dividendpolicy. The population is all of manufacturing companies listed on Indonesia Stock Exchange for the period 2008–2012. Purposive sampling is used to choose the sample and 81 companies are found to be sample. The study uses multiple linear regression. The result shows that managerial ownership, institutional ownership, foreign ownership, ownership concentration, and the control variable free cash flow simultaneously have significant influence on dividend policy. Influence testing partially by the level of significant of 5% shows that managerial ownership has positive and significant influence on dividend policy, institutional ownership has insignificant influence on dividend policy, foreign ownership has insignificant influence on dividend policy, ownership concentration has positive and significant influence on dividend policy, and the control variable free cash flow has positive and significant influence on dividend policy.

scholarly journals Do corporate governance and ownership structure impact dividend policy in emerging market during financial crisis?

2017 ◽  
Vol 18 (3) ◽  
pp. 274-297 ◽  
Author(s):  
Mili Mehdi ◽  
Jean-Michel Sahut ◽  
Frédéric Teulon
Keyword(s):  
Corporate Governance ◽  
Financial Crisis ◽  
Ownership Structure ◽  
Dividend Policy ◽  
East Asian ◽  
Emerging Countries ◽  
Ownership Concentration ◽  
Ceo Duality ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to study the impact of the ownership structure and board governance on dividend policy in emerging markets. The authors test whether the effects of corporate governance on dividend policy change during crisis periods. Design/methodology/approach The authors use a panel regression approach on a sample of 362 non-financial listed firms from East Asian and Gulf Cooperation Council countries. Findings The results provide evidence that dividend payout decision increases with institutional ownership and board activity. The authors find that in emerging countries, dividend policy of firms with CEO duality and without CEO duality does not depend on the same set of factors. It is shown that the ownership concentration and board independency affect significantly the dividend policy of firms with COE duality. Finally, the results show that during the recent financial crisis, dividend decision is inversely related to CEO duality, board size and the frequency of board meetings. Research limitations/implications Other variables of corporate governance and ownership structure can be studied more in depth. The results can be directly compared to an alternative sample of developed countries. Practical implications This study is of particular interest for managers and shareholders when adjusting their strategies of dividend payout during financial crisis. Originality/value The authors employ a specific approach to investigate the impact of CEO duality on dividend policy in East Asian countries. An important aspect of the results is that that for firms with CEO who is also the chairperson, the dividend decision is negatively related to ownership concentration and board independence. This research contributes to the understanding of dividend policy by testing whether the impact of corporate governance on dividend policy changes during crisis periods in emerging countries. To the best of the authors’ knowledge, this work is the first to directly address this issue from this perspective.

Ownership concentration, firm performance, and dividend policy in Hong Kong

2005 ◽  
Vol 13 (4) ◽  
pp. 431-449 ◽  
Author(s):  
Zhilan Chen ◽  
Yan-Leung Cheung ◽  
Aris Stouraitis ◽  
Anita W.S. Wong
Keyword(s):  
Hong Kong ◽  
Firm Performance ◽  
Dividend Policy ◽  
Ownership Concentration

scholarly journals The Role of Ownership Concentration and Dividend Policy on Firm Performance

2020 ◽  
Vol 3 (2) ◽  
pp. 1-13
Author(s):  
Sadia Murtaza ◽  
Ahmad Noor-Ud-Din ◽  
Amel Aguir ◽  
Saadia Batool
Keyword(s):  
Firm Performance ◽  
Dividend Policy ◽  
Academic Research ◽  
Negative Relationship ◽  
Generalized Least Squares ◽  
Ownership Concentration ◽  
Annual Reports ◽  
Significant Positive Association ◽  
Firm Financial Performance

Purpose- The main aim of this study is to determine the role of ownership concentration and dividend policy on the firm performance of chemical sector firms of Pakistan. Design/Methodology- This research used the secondary data collected from the annual reports of the companies listed at the Karachi Stock Exchange (KSE). However, inclusion criteria are the 26 listed firms from 2012 to 2017, giving a total of 156 observations. This study used the Generalized Least Squares Model. Findings- The findings reveal that ownership concentration has a significant positive association with firm financial performance. This stated that larger shareholders could attribute to the alignment of managerial incentives with shareholder interests. They also monitor the team very effectively and efficiently. The dividend policy has a significant positive relationship with ROA. Leverage and tangibility have a significant negative relationship with firm performance. Practical Implications- These results potentially can be relevant for policymakers and academic research as well as also helpful for managers and policymakers.

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