Ownership Structure and Dividend Policy: Evidence from South Asia

Posted: 18 Nov 2018

Date Written: December 23, 2014

Abstract

Cash dividend is among the most important sources of cash flow for the shareholders through which they gauge firm’s performance. Corporate managers also use dividends to signal company’s financial strength to attract potential investors. Empirical findings on determinants of dividend policy provide mixed and inconclusive results which has made the whole issue a “puzzle” as described by Black (1976), whose pieces do not fit together. Allen et. al. (2000) argued the dividend problem as one of the thorniest puzzles in corporate finance. The present study investigates the relationship between managers’ ownership and dividend policy in emerging economies of South Asia. The data of listed non-financial companies is collected from Bangladesh, India, Pakistan and Sri Lanka and analyzed with least square and Tobit regression models during the period 2006-2010. It is found that managers’ ownership is significantly and positively related with dividend payout in Bangladesh and India but negatively related in Pakistan and Sri Lanka.

Keywords: Dividend Policy

JEL Classification: Dividend Policy

Suggested Citation

Mirza, Hammad Hassan, Ownership Structure and Dividend Policy: Evidence from South Asia (December 23, 2014). Available at SSRN: https://ssrn.com/abstract=3271864

Hammad Hassan Mirza (Contact Author)

Noon Business School ( email )

Noon Business School
University of Sargodha
Sargodha 40100, Punjab 40100
Pakistan

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