The Impact of Ownership Structure on Debt Financing of Japanese Firms With the Agency Cost of Free Cash Flow

2004 ◽  
Author(s):  
Lingling Wu
Keyword(s):  
Cash Flow ◽  
Ownership Structure ◽  
Agency Cost ◽  
Free Cash Flow ◽  
Debt Financing ◽  
Japanese Firms ◽  
The Impact

How does ownership structure affect the financing and dividend decisions of firm?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tahar Tayachi ◽  
Ahmed Imran Hunjra ◽  
Kirsten Jones ◽  
Rashid Mehmood ◽  
Mamdouh Abdulaziz Saleh Al-Faryan
Keyword(s):  
Ownership Structure ◽  
Dividend Policy ◽  
Generalized Method Of Moments ◽  
Institutional Ownership ◽  
Agency Cost ◽  
Debt Financing ◽  
Policy Implications ◽  
Managerial Ownership ◽  
Content Type ◽  
The Impact

Purpose Ownership structure deals with internal corporate governance mechanism, which plays important role in minimizing conflict of interests between shareholders and management Ownership structure is an important mechanism that influences the value of firm, financing and dividend decisions. This paper aims to examine the impact of the ownership structures, i.e. managerial ownership, institutional ownership on financing and dividend policy. Design/methodology/approach The authors use panel data of manufacturing firms from both developed and developing countries, and the generalized method of moments (GMM) is applied to analyze the results. The authors collect the data from DataStream for the period of 2010 to 2019. Findings The authors find that managerial ownership and ownership concentration have significant and positive effects on debt financing, but they have significant and negative effects on dividend policy. Institutional ownership shows a positive impact on financing decisions and dividend policy for sample firms. Originality/value This study fills the gap by proving the policy implications for both firms and investors, as managers prefer debt financing, but at the same time try to ignore dividend payment. Therefore, investors may not invest in firms with a higher proportion of managerial ownership and may choose to invest more in institutional ownership, which lowers the agency cost.

scholarly journals Kebijakan Dividen dari Perspektive Agency Cost Model (Studi Kasus Perusahaan yang Terdaftar di Bursa Efek Indonesia periode 2011-2013)

2016 ◽  
Vol 5 (1) ◽  
pp. 73
Author(s):  
Akhmad Hitten
Keyword(s):  
Cash Flow ◽  
Ownership Structure ◽  
Cost Model ◽  
Investment Decisions ◽  
Listed Companies ◽  
Agency Cost ◽  
Free Cash Flow ◽  
Dividend Policies ◽  
Main Model ◽  
Observation Period

The paper examines the influence of agency theory on dividend policies with free cash flow,maturity, capital structure, and ownership dividend variables. The sample used in this research isIndonesian listed companies with observation period from 2010 to 2013, and the data collectiontechnique used is data pooling or merging data. The data is analyzed with multiple linearregression analysis in SPSS program. The result of this study indicates that free cash flow,maturity, and ownership structure do not influence devidend policies, however capital structureinfluences dividend policies in Indonesian listed companies. The research also implies thatagency cost theory, as the main model of relevance dividend preposition, cannot explaindividend policies in Indonesian Companies. The investors cannot rely solely on dividend policiesin term of investment decisions in the future. 

scholarly journals OWNERSHIP STRUCTURE, DIVIDEND PAYMENT, AGENCY COST AND CORPORATE VALUE (SUATU PENGUJIAN MODEL STRUKTURAL)

2017 ◽  
Vol 14 (1) ◽  
pp. 39
Author(s):  
Isti Fadah
Keyword(s):  
Structural Equation Model ◽  
Cash Flow ◽  
Ownership Structure ◽  
Structural Equation ◽  
Agency Cost ◽  
Equation Model ◽  
Free Cash Flow ◽  
Corporate Value ◽  
Dividend Payment ◽  
Cash Flow Risk

The  agency problem come because of separation between ownership and management on large corporate, there is a conflict between shareholder as an owner and manager as an agent. Manager focus on high growth of corporate (low dividend) but the owner prefer high dividend. The aims of the research are (1)  to analysis the effect of free cash flow, risk and ownership structure to dividend payment ,(2) to analysis the effect of free cash flow, risk and ownership structure to  agency cost. (3) to analysis the effect of dividend payment to corporate value, and (4) to analysis the effect of and agency cost  to corporate value The technique sampling is purposive sampling. Secondary data is used in this research. It is from financial report like balance sheet, financial statement and cash flow report. It is gotten from Indonesian Stock Exchange. The research period is 2000 up to 2006. It uses pooled data ( joint of time series data and cross section data) so the analysis units are 271 (n=271).  To Analysis data  is used descriptive  analysis and also statistical analysis that’s name  structural equation model (SEM). It uses structural equation model (SEM) because the model has a ladder causality relationship and several variable like ownership structure, agency cost, risk , dividend payment and corporate value are latent variables.  The results show that (1)  risk has a positive significant effect to the agency cost, It means that agency cost can reduce the risk especially high risk investment that manger can do.  (2) Dividend payment  has a positive significant effect to the corporate value, It supports the-birds-in-the-hand theory and (3) risk has a positive significant effect to the corporate value. It means that investor always care about risk of corporate where they will invest.

scholarly journals OWNERSHIP STRUCTURE, DIVIDEND PAYMENT, AGENCY COST AND CORPORATE VALUE (SUATU PENGUJIAN MODEL STRUKTURAL)

2018 ◽  
Vol 14 (1) ◽  
Author(s):  
Isti Fadah
Keyword(s):  
Structural Equation Model ◽  
Cash Flow ◽  
Ownership Structure ◽  
Structural Equation ◽  
Agency Cost ◽  
Equation Model ◽  
Free Cash Flow ◽  
Corporate Value ◽  
Dividend Payment ◽  
Cash Flow Risk

The  agency problem come because of separation between ownership and management on large corporate, there is a conflict between shareholder as an owner and manager as an agent. Manager focus on high growth of corporate (low dividend) but the owner prefer high dividend. The aims of the research are (1)  to analysis the effect of free cash flow, risk and ownership structure to dividend payment ,(2) to analysis the effect of free cash flow, risk and ownership structure to  agency cost. (3) to analysis the effect of dividend payment to corporate value, and (4) to analysis the effect of and agency cost  to corporate value The technique sampling is purposive sampling. Secondary data is used in this research. It is from financial report like balance sheet, financial statement and cash flow report. It is gotten from Indonesian Stock Exchange. The research period is 2000 up to 2006. It uses pooled data ( joint of time series data and cross section data) so the analysis units are 271 (n=271).  To Analysis data  is used descriptive  analysis and also statistical analysis that’s name  structural equation model (SEM). It uses structural equation model (SEM) because the model has a ladder causality relationship and several variable like ownership structure, agency cost, risk , dividend payment and corporate value are latent variables.  The results show that (1)  risk has a positive significant effect to the agency cost, It means that agency cost can reduce the risk especially high risk investment that manger can do.  (2) Dividend payment  has a positive significant effect to the corporate value, It supports the-birds-in-the-hand theory and (3) risk has a positive significant effect to the corporate value. It means that investor always care about risk of corporate where they will invest.

scholarly journals Free cash flow, ownership structure, and capital structure: Impact on agency cost

2020 ◽  
Vol 2 (2) ◽  
pp. 63-71
Author(s):  
Yoga Khomaini Aditya ◽  
Husnah Nur Laela Ermaya ◽  
Ratna Hindria Dyah Pita Sari
Keyword(s):  
Capital Structure ◽  
Cash Flow ◽  
Ownership Structure ◽  
Agency Cost ◽  
Free Cash Flow

scholarly journals Determinan Manajemen Laba Perusahaan di Sektor Konsumsi

2019 ◽  
Vol 3 (2) ◽  
pp. 96
Author(s):  
Muhammad Fajri
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Cash Flow ◽  
Institutional Ownership ◽  
Free Cash Flow ◽  
Earning Management ◽  
Managerial Ownership ◽  
Leverage Ratio ◽  
Good Corporate Governance ◽  
The Impact

The aim of this research is to provide empirical evidence on the impact of good corporate governance, free cash flow, and leverage ratio on earnings management. Good corporate governance is measured by audit committee’s size, the proportion of independent commissioners, institutional ownership, and managerial ownership. Discretionary accrual is the proxy of earning management. This research used 28 consumer goods companies listed in Indonesia Stock Exchange from 2016 to 2018. Data were analyzed using panel data with random effect model. Based on the result of analysis concluded that all components of good corporate governance (audit committee’s size, the proportion of independent commissioners, institutional ownership, and managerial ownership), have no significant effect on earnings management, on other hand leverage ratio has a negative effect and no significant on earning management, and free cash flow has a positve and no significant effect on earnings management

scholarly journals Financial Control Systems and Financial Systems Theory: Free Cash Flow and Profitability Nexus: a Comparative Study of Manufacturing Firms in Nigeria and Ghana

2020 ◽  
Vol 15 ◽  
Keyword(s):  
Cash Flow ◽  
Net Present Value ◽  
Performance Metrics ◽  
Positive Impact ◽  
Research Work ◽  
Manufacturing Firms ◽  
Free Cash Flow ◽  
Estimation Model ◽  
Financial Systems ◽  
The Impact

In Financial Systems, the impact of Free Cash Flow (FCF) on the performance of a company has been in the center of academic discourse in recent years. Several studies have tried to ascertain the nature and magnitude of the relationship between free cash flow and firm profitability with conflicting results coming from different scholars. The main objective of this research work was to examine the impact of FCF on the profitability of quoted manufacturing firms in the Nigerian and Ghana stock exchanges. Data were pooled from twenty (20) different companies (ten each from Nigeria and Ghana) for a period of six years (2012 – 2017). A panel data estimation model was used to measure the impact of FCF and other performance metrics on the Return on Assets (ROA), which is our chosen profitability measure. The results show a positive but insignificant relationship between FCF and ROA both for Ghana and Nigerian manufacturing firms. Also, sales growth showed a positive impact on profitability of both countries while leverage negatively impacted on profitability. with Ghana being significant at 5%. The implication of the findings of the study is that it makes no business sense for companies to keep piling up excess funds beyond that which is needed for transactional purposes. The similarity between the results from Ghana and Nigeria in most of the variables shows that the findings of this study can be generalized to other countries. Based on the findings of the study, we recommend that the management of companies should strive to keep only the minimum needed free cash flow while the rest should be invested in other projects with positive net present value

Corporate cash flow and dividends smoothing: a panel data analysis at Bursa Malaysia

2015 ◽  
Vol 13 (1) ◽  
pp. 2-19 ◽  
Author(s):  
Apedzan Emmanuel Kighir ◽  
Normah Haji Omar ◽  
Norhayati Mohamed
Keyword(s):  
Panel Data ◽  
Cash Flow ◽  
Panel Data Analysis ◽  
Generalized Method Of Moments ◽  
Cash Flows ◽  
Payout Policy ◽  
Free Cash Flow ◽  
Content Type ◽  
Financial Firms ◽  
The Impact

Purpose – The purpose of this paper is to contribute to the debate and find out the impact of cash flow on changes in dividend payout decisions among non-financial firms quoted at Bursa Malaysia as compared to earnings. There has been renewed debate in recent finance and accounting literature concerning the key determinants of changes in dividends payout policy decisions in some jurisdictions. The conclusion in some is that firms base their dividend decisions on cash flows rather than published earnings. Design/methodology/approach – The research made use of panel data from 1999 to 2012 at Bursa Malaysia, using generalized method of moments as the main method of analysis. Findings – The research finds that Malaysia non-financial firms consider current earnings more important than current cash flow while making dividends payout decisions, and prior year cash flows are considered more important in dividends decisions than prior year earnings. We also found support for Jensen (1986) in Malaysia on agency theory, that managers of firms pay dividends from free cash flow to reduce agency conflicts. Practical implications – The research concludes that Malaysian non-financial firms use current earnings and less of current cash flow in making changes in dividends policy. The policy implication is that current earnings are dividends smoothing agents, and the more they are considered in dividends payout decisions, the less of dividends smoothing. Social implications – If dividends smoothing is encouraged, it could lead to dividends-based earnings management. Originality/value – The research is our novel contribution of assisting investors and government in making informed decisions regarding dividends policy in Malaysia.

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