Company Dividends and Ownership Structure: Evidence from UK Panel Data
Tehmina S. Khan
University of Oxford - Nuffield College; International Monetary Fund (IMF)
Economic Journal, Forthcoming
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.
Number of Pages in PDF File: 19
Keywords: Corporate Governance, Dividends, Agency Models, Ownership Structure, Panel Data
JEL Classification: G22, G23, G32, G34, G32Accepted Paper Series
Date posted: May 9, 2006
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