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: Suggested Citation