The Effect of Ownership Concentration and Composition on Dividends: Evidence from Latin America

42 Pages Posted: 6 Oct 2014 Last revised: 22 Jul 2016

See all articles by Maximiliano Gonzalez

Maximiliano Gonzalez

Universidad de los Andes; Universidad de los Andes, Colombia - School of Management

Carlos Alberto Molina

IESA

Eduardo Pablo

Minnesota State University Moorhead

John Rosso

UPTC - Faculty of Economics and Management Sciences; Universidad de Los Andes - Finance Department

Date Written: May 31, 2016

Abstract

We analyze a unique data set of publicly traded firms based in six Latin American countries to study the joint effect of ownership concentration and composition on dividend policy. We find that when ownership concentration is high, and the largest investor is identified as an individual, firms tend to pay fewer dividends, consistent with individual investors extracting benefits from minority shareholders. However, if the largest shareholder is based in a common-law country, the dividend paid is significantly higher. Finally, the higher the ownership of the second-largest shareholder, the firms decrease the dividends, suggesting a monitoring role of a large shareholder.

Keywords: Dividends; ownership concentration; international corporate governance

JEL Classification: G34, G35

Suggested Citation

Gonzalez, Maximiliano and Molina, Carlos Alberto and Pablo, Eduardo and Rosso, John, The Effect of Ownership Concentration and Composition on Dividends: Evidence from Latin America (May 31, 2016). Available at SSRN: https://ssrn.com/abstract=2505720 or http://dx.doi.org/10.2139/ssrn.2505720

Maximiliano Gonzalez

Universidad de los Andes ( email )

Calle 21 No. 1-20
Costado Occidental
Bogotá, AK Cundinamarca 1
Colombia
573144869255 (Phone)

Universidad de los Andes, Colombia - School of Management ( email )

Carrera Primera # 18A-12
Bogotá
Colombia

Carlos Alberto Molina

IESA ( email )

IESA, dept of Finance
Av. IESA, San Bernardino
Caracas, DF 1010
Venezuela
+58-212-555.4551 (Phone)
+58-212-555.4446 (Fax)

HOME PAGE: http://www.iesa.edu.ve/profesores-e-investigacion/profesores/P088

Eduardo Pablo (Contact Author)

Minnesota State University Moorhead ( email )

Moorhead, MN 56563
United States
218-4774655 (Phone)

John Rosso

UPTC - Faculty of Economics and Management Sciences ( email )

Av Central Norte -UPTC
Tunja, Boyaca 150001
Colombia
87441550 (Phone)

HOME PAGE: http://www.uptc.edu.co

Universidad de Los Andes - Finance Department ( email )

Carrera 1 # 18A-12
Bogota, D.C. 110311
Colombia

HOME PAGE: http://administracion.uniandes.edu.co

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
312
Abstract Views
1,834
Rank
162,738
PlumX Metrics