scholarly journals The Role of Institutional Ownership and Industry Characteristics on the Propensity to Pay Dividend: An Insight from Company Open Innovation

2020 ◽  
Vol 6 (3) ◽  
pp. 74
Author(s):  
S. Martono ◽  
Arief Yulianto ◽  
Rini Setyo Witiastuti ◽  
Angga Pandu Wijaya
Keyword(s):  
Agency Theory ◽  
Dividend Policy ◽  
Manufacturing Sector ◽  
Institutional Ownership ◽  
Industrial Sector ◽  
Free Cash Flow ◽  
External Monitoring ◽  
Industrial Sectors ◽  
Sectoral Differences ◽  
Propensity To Pay

The purpose of this study is to test the free cash flow agency theory hypothesis; namely, (a) whether differences in industrial sector affect a company’s propensity to pay dividends, and (b) whether institutional ownership is able to substitute for the propensity to pay dividends as a bonding mechanism. The analysis uses logistic regression to explore the existence of institutional ownership as a substitute for paying cash dividends in companies belonging to different industrial sectors. The results show that companies in the manufacturing sector have a greater propensity to pay dividends compared to those in non-manufacturing sectors. The results also indicate that low institutional ownership, as an external monitoring mechanism, can substitute for increasing the propensity to pay dividends. Overall, the results are consistent with implications in dividend policy. The results support the notion that the propensity to pay dividends accommodates different behavioral factors, considering sectoral differences. In addition, the results illustrate the relevance of alternative theories in explaining dividend policy from the perspective of agency theory. The results show that sectoral comparisons, in addition to institutional ownership factors, play important roles in the propensity of Indonesian companies to pay dividends. This study shows that each industry sector has different income characteristics, which affect the differences in propensity to pay dividends.

scholarly journals Can Sectoral Re-allocation Explain the Jobless Growth? Empirical Evidence from Pakistan

2010 ◽  
Vol 49 (4II) ◽  
pp. 705-718 ◽  
Author(s):  
Azad Haider
Keyword(s):  
Structural Change ◽  
Empirical Evidence ◽  
Structural Changes ◽  
Manufacturing Sector ◽  
Industrial Sector ◽  
Foreign Technology ◽  
Industrial Sectors ◽  
Jobless Growth

The present paper discuss the nature of structural changes in employment to understand jobless growth in Pakistan for the period spanning over 1967-2008. In our work (elsewhere)1 analysing Pakistan at sectoral level to find underlying factors generating jobless growth, we found that Jobless growth in manufacturing sector was anticipated. Industrial sector has a significant importance in any economy across the glob. Recent changes in the use of capital—based foreign technology has resulted in substitution of labour with non-labour inputs such as capital. Employment shifts between industrial sectors are often witnessed as indicators of Structural change in an economy. In this paper we are more interested in the nature of structural change that took place in Pakistan economy over 1967-2008. We set to analyse four commonly used measures of sectoral reallocation proposed by Lilien (1982), Groshen and Potter (2003), Rissman (1997), and Aaronson, Rissman and Sullivan (2004). Findings of our work are suggesting that the economy of Pakistan underwent structural change during periods of recession and recovery. However, it does appear that structural changes were more pronounced at the time of 1969 recession than that of 1991 recession. A plausible explanation for this result might be significant shifts in employment from agriculture towards services sectors. We conclude, based on the evidence from our study, that sectoral reallocation is one of the major causes of jobless growth in Pakistan.

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 Corporate Governance and Dividend Policy in the Presence of Controlling Shareholders

2020 ◽  
Vol 13 (8) ◽  
pp. 162
Author(s):  
Ricardo Rodrigues ◽  
J. Augusto Felício ◽  
Pedro Verga Matos
Keyword(s):  
Corporate Governance ◽  
Data Analysis ◽  
Panel Data ◽  
Agency Theory ◽  
Dividend Policy ◽  
Panel Data Analysis ◽  
Free Cash Flow ◽  
Governance Mechanisms ◽  
Controlling Shareholders ◽  
Listed Firms

Based on agency theory, we focused on the influence of corporate governance in the dividend policy of large listed firms with headquarters in continental Europe countries. Previous research focused on the influence of corporate governance on the performance and risk of listed firms, but the influence of corporate governance on the dividend policy has rarely been addressed despite the importance of dividends for shareholders and the implications on the free cash-flow, whose application may be a source of conflicts between managers and shareholders. In this paper, we study the influence of a set of governance mechanisms on the dividend policy over 12 years (2002 to 2013). The results, based on a panel data analysis, support the importance of governance mechanisms toward the protection of shareholders’ interests, and reveal that the decisions on whether to pay dividends and how much to pay are grounded on different antecedents.

scholarly journals Pengaruh Struktur Kepemilikan, Free Cash Flow terhadap Kebijakan Dividen pada Perusahaan Asuransi yang Terdaftar di BEI Tahun 2013-2017

2018 ◽  
Vol 17 (2) ◽  
pp. 94
Author(s):  
Deaninda Sekar Pembayun ◽  
Subarjo Subarjo
Keyword(s):  
Cash Flow ◽  
Ownership Structure ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Institutional Ownership ◽  
Free Cash Flow ◽  
Managerial Ownership ◽  
Insurance Company ◽  
Beta Coefficient

This study aims to find out the Effect of Managerial Ownership Structure (MNJR), Institutional Ownership Structure (INST), Free cash flow (FCF), and the Ownership Structure on Dividend Policy of Insurance Company Registered on the Indonesia Stock Exchange 2013-2017. The population in this study amounted to 55 insurance companies listed on the Indonesia Stock Exchange in 2013-2017. The samples taken were 11 companies with purposive sampling techniques. Hypothesis testing is carried out using multiple linear regression analysis. The results of the study showed that (1) Managerial Ownership Structure does not affect the Dividend Policy as evidenced by the beta coefficient (B) of 0,000, t = -0,064 <t = 2,008, significance probability of 0,0950> 0,05 (2) ownership structure Institutional effect on Dividend Policy is proven by beta coefficient (B) of 0.020, t = 3.053> t = 2.008 and significance probability value of 0.004 <0.05 (3) Free cash flow does not affect Dividend Policy as evidenced by beta coefficient (B) 0,001, t = 1,904 <t = 2,008 and significance probability value of 0,063> 0,05 (4) probability Managerial Ownership Structure, Institutional Ownership Structure, Simultaneous Cash Flow affect the Dividend Policy as evidenced by the value F = 5,031> F = 4,238 , the significance probability value is 0.009 <0.05. Keywords: Managerial Ownership, Institutional Ownership, Free cash flow and Dividend Policy.

scholarly journals THE SIGNALS OF DIVIDEND

2018 ◽  
Vol 7 (01) ◽  
pp. 42
Author(s):  
Novi Swandari Budiarso
Keyword(s):  
Logistic Regression ◽  
Hypothesis Testing ◽  
Agency Theory ◽  
Firm Size ◽  
Dividend Policy ◽  
Institutional Ownership ◽  
Managerial Ownership ◽  
Listed Firms

Dividend decisions is a type of policy that earnings should be distributed to shareholders and sometimes contrast with the interest by insiders whether to retain or reinvest. The objective of this study is to examine the determinants of dividend policy on 230 listed firms in period of 2010 to 2011 and conducts logistic regression for hypothesis testing. This study finds that profitability, firm size, and institutional ownership are significant to dividend policy while managerial ownership is insignificant. This findings indicate that most of listed firms of the sample of this study determine the dividend policy based on profits. This study also finds that more larger the firms or institutional ownership then they tend to increase the dividends. Limited to sample, this study proves that agency theory is not applicable for dividend policy in Indonesia as the managerial ownership have no relationship with the dividend policy.

scholarly journals Kepemilikan Manajerial, Kepemilikan Institusional dan Kebijakan Dividen serta Free Cash Flow sebagai Pemoderasi

2021 ◽  
Vol 31 (7) ◽  
pp. 1710
Author(s):  
Ni Made Ari Trisna Dewi ◽  
Anak Agung Gde Putu Widanaputra
Keyword(s):  
Regression Analysis ◽  
Cash Flow ◽  
Sampling Method ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Free Cash Flow ◽  
Managerial Ownership ◽  
Manufacturing Companies ◽  
Analysis Technique

This study aims to determine the effect of managerial ownership and institutional ownership on dividend policy with free cash flow as a moderating variable. This research was conducted at manufacturing companies listed on the Indonesia Stock Exchange (BEI) in 2015-2019. The sample was selected by means of a purposive sampling method with 42 companies as samples and 210 observations. The analysis technique used in this research is Moderated Regression Analysis (MRA). The results of this study indicate that the higher the managerial ownership, the higher the dividend policy, especially in companies that have high free cash flow, and the higher the institutional ownership, the higher the dividend policy, especially in companies with high free cash flow. Keywords: Managerial Ownership; Institutional Ownership; Free Cash Flow; Dividend Policy.

Determinants of dividend policy: evidence from an emerging and developing market

2019 ◽  
Vol 45 (3) ◽  
pp. 413-429 ◽  
Author(s):  
N. Jayantha Dewasiri ◽  
Weerakoon Banda Yatiwelle Koralalage ◽  
Athambawa Abdul Azeez ◽  
P.G.S.A. Jayarathne ◽  
Duminda Kuruppuarachchi ◽  
...  
Keyword(s):  
Dividend Policy ◽  
State Ownership ◽  
Free Cash Flow ◽  
Future Research ◽  
Dividend Yield ◽  
Short Term ◽  
Dividend Payout ◽  
Content Type ◽  
Investment Opportunities ◽  
Propensity To Pay

PurposeThe purpose of this paper is to identify the determinants of dividend policy in an emerging and developing market.Design/methodology/approachThe study employs a quantitative approach using 191 Sri Lankan firms and 1,337 firm-year observations as the sample. The authors apply a Binary Logistic Regression model to uncover the determinants of the propensity to pay dividends, and a Fixed Effect Panel Regression to investigate the determinants of dividend payout.FindingsThe authors identify past dividend decision, earnings, investment opportunities, profitability, free cash flow (FCF), corporate governance, state ownership, firm size and industry influence as the key determinants of propensity to pay dividends. In addition past dividends, investment opportunities, profitability and dividend premium are identified as the determinants of dividend payout. Moreover, there is a feedback between dividend yield and profitability in one lag and between dividend yield and dividend premium in two lags, as short-term relationships. Hence, past dividend decision or payout, profitability and investment opportunities are a common set of determinants with implications for both propensity to pay dividends and its payout. The findings support theories of dividends such as signaling, outcome, catering, life cycle, FCF and pecking order.Practical implicationsThe findings are important for investors, managers and future research. Investors should focus on the determinants identified by our study when making investment decisions whereas managers should practice the same when formulating appropriate dividend policies for their firms. Future research should rely on propensity to pay dividends and its payout simultaneously to promote a theoretical consensus on the dividend determinant puzzle.Originality/valueThis is the first study that investigates determinants of propensity to pay dividends and dividend payout along with short-term relationships in a single study.

scholarly journals PENGARUH FREE CASH FLOW, OWNERSHIP STRUCTURE, GROWTH OPPORTUNITY TERHADAP KEBIJAKAN DIVIDEN

2021 ◽  
Vol 10 (6) ◽  
pp. 560
Author(s):  
Ni Putu Oppie Widiantari ◽  
Made Reina Candradewi
Keyword(s):  
Real Estate ◽  
Cash Flow ◽  
Ownership Structure ◽  
Dividend Policy ◽  
Institutional Ownership ◽  
Free Cash Flow ◽  
Managerial Ownership ◽  
Significant Positive Effect ◽  
Growth Opportunity ◽  
Positive Effect

This study aims to explain the effect of free cash flow, ownership structure which is divided into managerial ownership and institutional ownership, and growth opportunity on dividend policy in property and real estate companies in Indonesia. This research is located in property and real estate companies listed on the Indonesia Stock Exchange. Sampling in this study using census techniques using the entire population of property and real estate companies that distribute dividends, so as to get a sample of 18. The analysis technique used in this study uses multiple linear regression analysis. From the analysis conducted, the results of the study indicate that free cash flow has a significant positive effect on dividend policy. Managerial ownership, which is proxied by the percentage of manager's share ownership, has a significant positive effect on dividend policy. Institutional ownership which is proxied by the percentage of institutional share ownership has a significant positive effect on dividend policy and growth opportunity which is proxied by asset growth has a significant positive effect on dividend policy. Keywords: free cash flow, ownership structure, growth opportunity, dividend policy

scholarly journals Dividend Policy Trend: A Comprehensive Study on the Listed Industrial Sector of Bangladesh

2019 ◽  
pp. 2
Author(s):  
Mohammad Shahidul Islam ◽  
Adnan Atm
Keyword(s):  
Capital Market ◽  
Dividend Policy ◽  
Manufacturing Sector ◽  
Industrial Sector ◽  
Medium Size ◽  
Cash Dividend ◽  
Parametric Test ◽  
Listed Firms ◽  
Size Firm ◽  
The Capital Market

The financial decision is rotated around the dividend decision. The objective is to identify the dividend pattern and the management’ views of dividend policy for revealing the present scenario of dividend practices in the capital market of Bangladesh. The parametric test, non-parametric test and percentile are used for inferring the result. In the manufacturing sector, the miscellaneous sector provides the highest payout. The DPS, EPS, MPS of the large size firm is better than small and medium size firms. The payout of the older firms is more than the newly listed firms. The highest payouts are in medium leveraged firm, low risk’s firm, medium PE ratio’s firm. The survey results reveal that the both shareholders and companies prefer the cash dividend most because of majority shareholders’ expectation. The most of the companies pay cash dividend with stable payout. The majority companies follow increasing trend in dividend payment but there is no satisfactory research to justify the investors’ preference. The capital market related stakeholders should follow these findings.

scholarly journals Pengaruh Free cash flow, Kepemilikan Institusional, Profitabilitas dan Leverage Tehadap Kebijakan Dividen Tunai Pada Perusahaan Property dan Real estate yang Terdaftar di Bursa Efek Indonesia

2020 ◽  
Vol 15 (2) ◽  
pp. 26-34
Author(s):  
Syelly Wulandari ◽  
Nita Priska Ambarita ◽  
Mia Dwi Puji Wahyuni Darsono
Keyword(s):  
Real Estate ◽  
Cash Flow ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Predictive Ability ◽  
Institutional Ownership ◽  
Free Cash Flow ◽  
Return On Assets ◽  
Equity Ratio ◽  
Positive Effect

This research aims to examine and analyze the effect of free cash flow, institutional ownership, profitability and Leverage on dividend policy by using an approach multiple regression model. The proxies used to measure the financial elements are free cash flow, institutional ownership, Return on Assets and debt to equity ratio. The population in this research is property and real estate  companies listed in Indonesia Stock Exchange for six years (2014-2019). Election sample procedure uses purposive sampling and the result are existed 5 companies that fulfill criteria so that amount of data studied by 30 data. The results of this research show that free cash flow, institutional ownership and profitability have a significant effect on dividend policy proxied by Dividend payout ratio. Leverage which is measured by debt to equity ratio hasn’t a significant effect on dividend policy. Free cash flow has a positive effect on dividend policy. Institutional ownership has a positive effect on dividend policy. Profitability which is measured by Return on Assets has a negative effect on dividend policy. The predictive ability of these variabel on dividend policy is 49,6% as shown by the amount of R square, while 50,4% is affected by the other factor which is not included in the research model.

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