Corporate dividend policy, minority shareholders right and equity value of firm: Evidence from Singapore

2020 ◽  
Vol 20 (2) ◽  
Author(s):  
Santanu K. Ganguli ◽  
Varun Dawar ◽  
Rakesh Arrawatia
Keyword(s):  
Dividend Policy ◽  
Minority Shareholders ◽  
Equity Value ◽  
Value Of Firm ◽  
Firm Evidence

scholarly journals RE-EXAMINING DIVIDEND PAYOUT, PROPORTION OF OWNERSHIP AND FIRM’S VALUE IN INDONESIA

2019 ◽  
Vol 4 (1) ◽  
pp. 53
Author(s):  
Yosman Bustaman ◽  
Agustini Agustini ◽  
Anita Juwita
Keyword(s):  
Capital Market ◽  
Firm Value ◽  
Dividend Policy ◽  
Cash Flows ◽  
Capital Gains ◽  
Net Income ◽  
Minority Shareholders ◽  
Dividend Payout ◽  
Value Of Firm ◽  
The Impact

We re-examining the impact of dividend policy and proportion of ownership on firm value in the Indonesian Capital Market, which include 2712 firm-year over the period of 2005-2016. Tobin Q measures firm value, dividend payout over net income is a measure of dividend policy, and meanwhile we also include proportion ownership of insider of company, foreign owner and government owner. Panel data regression model is used in our analysis. After controlling with firm specific variables; size of company, liquidity, profitability and leverage, we find that dividend policy is irrelevant in driving the value of firm in Indonesian capital market. This phenomenon might occur in Indonesia because market is characterized by short-term investment prospective from investors. They are less concern on dividend payment, more focus on capital gains. Additionally, it seems that insiders expropriate the firm cash flows for their benefits on the cost of minority shareholders with their control power, consequently value lower by the market. However, the higher the ownership by foreigner impact value higher by the market, positive reaction emerge possibly because the firm perceive applying good corporate governance. Concentrated ownership on government does not have significant relationship with the value of firm.

scholarly journals THE ESSENCE AND IMPROVEMENT OF THE DIVIDEND POLICY FOR JOINT STOCK COMPANIES

2021 ◽  
Author(s):  
Iurii Tararuiev ◽  
Keyword(s):  
Dividend Policy ◽  
Gradual Increase ◽  
Joint Stock Company ◽  
Enterprise Development ◽  
Practical Application ◽  
Minority Shareholders ◽  
Stock Company ◽  
Aggressive Approach ◽  
Advantages And Disadvantages ◽  
Dividend Payments

The paper is concerning the problems of forming a dividend policy of joint-stock companies. Also established that the lack of dividend policy leads to a decrease in business reputation and investment attractiveness of joint-stock companies, which negatively affects to the development of that ones. The comparing of variants to define conception of dividend policy of joint-stock company is presented in the paper. As a result, dividend policy of joint-stock company is defined in the paper as a complex of approaches to optimize the size of dividends for various shareholders' groups in order to comply with their property interests, taking into account the financial capabilities and priority objectives of a joint-stock company. Also, the main approaches and basic types of dividend policy realizing is analyzed in the paper with advantages and disadvantages of their practical application. The main alternatives concerning dividend policy are determined in the paper: the growth of investments and accelerated enterprise development with deterioration of the reputation among minority shareholders, or limiting investments with increasing dividends, which leads to improving the reputation and increasing the value of company. In addition, the methodical recommendations for improving the dividend policy of joint-stock companies are substantiated with the improving of current methods of calculating the value of dividends. It is established that the most optimal is dividend policy, which takes into account the relation between financial results and dividend payments of joint-stock company. Particular attention is paid to the substantiation of methods for calculating the value of dividends and allowances, the factor of payment and the and rate of dividends growth. The practical application of the results is important in the case of choosing an aggressive approach to realize dividend policy of joint-stock companies. Thus, the successful application of the recommendations described in the article will provide a gradual increase in business reputation and investment attractiveness of joint-stock companies.

scholarly journals The effect of ownership structure on dividend policy: evidence from Turkey

2016 ◽  
Vol 16 (1) ◽  
pp. 135-161 ◽  
Author(s):  
Basil Al-Najjar ◽  
Erhan Kilincarslan
Keyword(s):  
Family Involvement ◽  
Financial Institutions ◽  
Ownership Structure ◽  
Dividend Policy ◽  
Dividend Yield ◽  
Minority Shareholders ◽  
Foreign Investors ◽  
Dividend Payout ◽  
Content Type ◽  
Listed Firms

Purpose This paper aims to investigate the impact of ownership structure on dividend policy of listed firms in Turkey. Particularly, it attempts to uncover the effects of family involvement (through ownership and board representation), non-family blockholders (foreign investors, domestic financial institutions and the state) and minority shareholders on dividend decisions in the post-2003 period as it witnesses the major economic and structural reforms. Design/methodology/approach The paper uses alternative dividend policy measures (the probability of paying dividends, dividend payout ratio and dividend yield) and uses appropriate regression techniques (logit and tobit models) to test the research hypotheses, by focusing on a recent large panel dataset of 264 Istanbul Stock Exchange-listed firms (non-financial and non-utility) over a 10-year period 2003-2012. Findings The empirical results show that foreign and state ownership are associated with a less likelihood of paying dividends, while other ownership variables (family involvement, domestic financial institutions and minority shareholders) are insignificant in affecting the probability of paying dividends. However, all the ownership variables have a significantly negative impact on dividend payout ratio and dividend yield. Hence, the paper presents consistent evidence that increasing ownership of foreign investors and the state in general reduces the need for paying dividends in the Turkish market. Research limitations/implications Because of the absence of empirical research on how ownership structure may affect dividend policy and the data unavailability for earlier periods in Turkey, the paper cannot make comparison between the pre-and post-2003 periods. Nevertheless, this paper can be a valuable benchmark for further research. Practical implications The paper reveals that cash dividends are not used as a monitoring mechanism by investors in Turkey and the expropriation argument through dividends for Turkish families is relatively weak. Accordingly, the findings of this paper may benefit policymakers, investors and fellow researchers, who seek useful guidance from relevant literature. Originality/value To the best of the authors’ knowledge, this paper is the first to examine the link between ownership structure and dividend policy in Turkey after the implementation of major reforms in 2003.

Dividend Policy with Controlling Shareholders

2015 ◽  
Vol 16 (1) ◽  
Author(s):  
Maribel Sáez ◽  
María Gutiérrez
Keyword(s):  
Empirical Evidence ◽  
Dividend Policy ◽  
Empirical Literature ◽  
Minority Shareholders ◽  
Dividend Payout ◽  
Controlling Shareholders ◽  
Legal Rules ◽  
Ownership Structures ◽  
Agency Conflict ◽  
Concentrated Ownership

AbstractThis Article investigates the determinants of dividend policy in firms with concentrated ownership structures. A review of the empirical literature shows that dividend payout ratios are lower in firms with controlling shareholders. We explain this finding as a consequence of the legal rules governing cash distributions, which leave the dividend decision in the hands of the firm insiders, and the lack of monitoring mechanisms for checking the power of controlling shareholders. The analysis of the empirical evidence on dividend policy points to the existence of an unresolved agency conflict between controlling shareholders and outside investors. We conclude that controlling shareholders are currently using the dividend policy to expropriate minority shareholders.

scholarly journals The Effect of the Board Composition on Dividends: The Case of Brazilian and Chilean Family Firms

2020 ◽  
Vol 10 (2) ◽  
pp. 43-60
Author(s):  
Guadalupe C. Briano-Turrent ◽  
Karen Watkins-Fassler ◽  
Martha L. Puente-Esparza
Keyword(s):  
Dividend Policy ◽  
Family Firms ◽  
Positive Impact ◽  
Board Composition ◽  
Governance Mechanism ◽  
Minority Shareholders ◽  
Listed Firms ◽  
The Family ◽  
Negative Effect ◽  
Corporate Governance Mechanism

Based on the agency theory, this paper analyzes whether family firms pay more dividends compared to no-family firms and identifies whether the board composition affects the dividend policy. Brazil and Chile have established mandatory dividends, retain lower cash holdings, pay higher dividends compared with other markets in the region. The sample of study is composed by 853 observations from 49 Brazilian and 32 Chilean top publicly listed firms in terms of market capitalization over the 11-year period from 2004 to 2014. Using an unbalanced panel data, results indicate that family controlled firms distribute more dividends and board composition namely; board size and the proportion of women on the board have a significant and positive impact on the dividend policy of the firm. By contrast, COB-CEO duality has a negative effect. Thus, dividend policy constitutes an effective corporate governance mechanism in mitigating the family’ expropriation of minority shareholders’ wealth.

scholarly journals PENGARUH KEPEMILIKAN KELUARGA TERHADAP KEBIJAKAN DIVIDEN DENGAN BOARD OF INDEPENDENCE SEBAGAI VARIABEL MODERASI

2018 ◽  
Vol 8 (3) ◽  
pp. 614
Author(s):  
Poniman . ◽  
Sutrisno T ◽  
Abdul Ghofar
Keyword(s):  
Dividend Policy ◽  
Family Ownership ◽  
Type Ii ◽  
Agency Conflicts ◽  
Minority Shareholders ◽  
High Concentration ◽  
Good Corporate Governance ◽  
Corporate Governance Mechanisms ◽  
Positive Effect

High concentration of family ownership in East Asia has led to agency conflicts between the majority and minority shareholders potentially affecting the company's dividend policy. This study aims to examine the effect of family ownership on dividend policy. This study also examined the role of board of independence as a moderator in strengthening the influence of family ownership on dividend policy. The result proves that family ownership negatively affects dividend policy but with the existence of board of independence, family ownership has positive effect on dividend policy. This study contributes to the theory of agency type II which discusses conflicts between majority shareholders by family and minority that can be eliminated by good corporate governance mechanisms

Mandatory Dividend Policy, Growth, Liquidity and Corporate Governance: Evidence from Chile

2020 ◽  
Vol 23 (03) ◽  
pp. 2050025 ◽  
Author(s):  
Sakthi Mahenthiran ◽  
David Cademartori ◽  
Tom Gjerde
Keyword(s):  
Corporate Governance ◽  
Dividend Policy ◽  
American Economic Review ◽  
Market Liquidity ◽  
Governance Mechanism ◽  
Minority Shareholders ◽  
Dividend Smoothing ◽  
Corporate Governance Mechanism ◽  
Pros And Cons ◽  
Retained Earnings

Chilean publicly listed companies are required by law to pay out a minimum 30% of distributable earnings after taxes as dividends on common stock. The study extends Lintner’s [Lintner, J (1956). Distribution of incomes of corporations among dividend retained earnings and taxes. American Economic Review, 46, 97–113.] model of dividend smoothing and Banerjee [Banerjee, S, VA Gatchev and PA Spindt (2007). Stock market liquidity and firm dividend policy. Journal of Financial and Quantitative Analysis, 42(2), 369–398.] logistic model of the likelihood of a firm paying a dividend to investigate the signaling, liquidity, corporate governance, and information risk-based theories of dividends. The results show that Chilean firms’ excess dividends are smoothed in relation to the prior period level of excess dividends, and lagged earnings do not drive excess dividends even though the mandatory minimum dividend is defined in terms of lagged earnings. This insight establishes that dividend decisions regarding the size of the excess dividend and the likelihood of paying an excess dividend are distinct from the mandatory dividend payment. Additionally, the size of excess dividends and their likelihood are higher at firms with higher growth opportunities, a result consistent with the use of excess dividends as a signaling device. Results also demonstrate that greater transparency is associated with a greater likelihood of paying an excess dividend, but transparency does not drive policy regarding the size of the excess dividend. Moreover, the corporate governance mechanism creditor monitoring influences the size of excess dividends but not the likelihood of paying excess dividends. These results have implications for securities regulators evaluating the pros and cons of a mandatory dividend policy to protect minority shareholders in emerging markets.

Sign in / Sign up

Export Citation Format

Share Document