The effect of ownership structure on dividend policy of manufacturing companies

Cynthia Valentina(1), Liliana Inggrit Wijaya(2*), Endang Ernawati(3),

(1) Fakultas Bisnis dan Ekonomika, Universitas Surabaya, Surabaya, Indonesia
(2) Fakultas Bisnis dan Ekonomika, Universitas Surabaya, Surabaya, Indonesia
(3) Fakultas Bisnis dan Ekonomika, Universitas Surabaya, Surabaya, Indonesia
(*) Corresponding Author

Abstract


This study aims the impact of ownership structure on dividend on manufacturing companies listed on the Indonesia Stock Exchange and Malaysia Stock Exchange for the period 2015-2019. This study uses regression method as quantitative measurement level. The research used objects as many as 455 observations on the Indonesia Stock Exchange and 500 observations on the Malaysia Stock Exchange. The independent variables used in this research are foreign ownership, family ownership, and institutional ownership. The results of the study using observations on the Indonesia Stock Exchange found that family ownership and institutional ownership have a significant positive effect, while foreign ownership has an insignificant negative effect on dividend payout ratio. The results of the study using observations on the Malaysia Stock Exchange found that institutional ownership has a significant positive effect, while the rest has an insignificant positive on dividend payout ratio.

Keywords


Foreign Ownership, Family Ownership, Institutional Ownership, Dividend

Full Text:

PDF

References


Al-Najjar, B., & Kilincarslan, E. (2016). The effect of ownership structure on dividend policy: evidence from Turkey. Corporate Governance: The international journal of business in society.

Baba, N. (2009). Increased presence of foreign investors and dividend policy of Japanese firms. Pacific-Basin Finance Journal, 17(2), 163-174.

Black, S. (2009). Editorial in" Fashion Practice: Design, Creative Process and the Fashion Industry". Fashion Practice: The Journal of Design, Creative Process and the Fashion Industry, 1(1), 5-8.

Bernstein, P. L. (1998). The hidden risks in low payouts. Journal of Portfolio Management, 25(1), 1.

Burkart, M., Panunzi, F., & Shleifer, A. (2003). Family firms. The journal of finance, 58(5), 2167-2201.

Berle, A. A., & Means, G. G. C. (1991). The modern corporation and private property. Transaction publishers.

Chen, Z., Cheung, Y. L., Stouraitis, A., & Wong, A. W. (2005). Ownership concentration, firm performance, and dividend policy in Hong Kong. Pacific-Basin Finance Journal, 13(4), 431-449.

Chua, Jess H., James J. Chrisman, and Pramodita Sharma. "Defining the family business by behavior." Entrepreneurship theory and practice 23, no. 4 (1999): 19-39.

Cleassens, S., Djankov, S., & Lang, L. H. P. (2000). The separation of Ownership and control in East Asian Corporation. Journal of Financial Economics, 58(1), 81-112.

Claessens, S., & Yurtoglu, B. B. (2013). Corporate governance in emerging markets: A survey. Emerging markets review, 15, 1-33.

Easterbrook, F. H. (1984). Two agency-cost explanations of dividends. The American economic review, 74(4), 650-659.

Faccio, M., Lang, L. H., & Young, L. (2001). Dividends and expropriation. American economic review, 91(1), 54-78.

Farinha, J. (2003). Dividend policy, corporate governance and the managerial entrenchment hypothesis: an empirical analysis. Journal of Business Finance & Accounting, 30(9‐10), 1173-1209.

Gonzalez, M., Guzman, A., Pombo, C., & Trujillo, M. A. (2014). Family involvement and dividend policy in closely held firms. Family Business Review, 27(4), 365-385.

Gordon, M. J. (1962). The investment, financing, and valuation of the corporation. Homewood, IL: Richard D. Irwin.

Jensen, M. C. (1986). Agency cost of free cash flow, corporate finance, and, takeovers. The American economic review, 76(2), 323-329.

Jensen, M. C., & Meckling, W. H. (1979). Theory of the firm: Managerial behavior, agency costs, and ownership structure. In Economics social institutions (pp. 163-231). Springer, Dordrecht.

La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (1999). Corporate ownership around the world. Journal of finance, 54(2), 471-517.

La Porta, R et al (2000). Investor protection and corporate governance. Journal of financial economics, 58(1-2), 3-27.

Lintner, J. (1956). Distribution of incomes of corporation among dividends, retained earnings, and taxes. The American economic review, 46(2), 97-113.

Miller, M. H., & Modigliani, F. (1961). Divodend policy, growth, and the valuation of shares. Journal of business, 34(4), 411-433.

Muchtar, S., & Darari, E. (2017). Pengaruh Corporate Governance Terhadap Kinerja Perusahaan Manufaktur Yang Terdaftar Di Bursa Efek Indonesia. Jurnal Keuangan dan Perbankan, 15(2).

Morck, R., & Yeung, B. (2003). Agency problems in large family business groups. Entrepreneurship theory and practice, 27(4), 367-382.

Rajverma, A.K et al (2019). Ownership structure influencing in the joint determination of dividend, leverage, cost of capital. Cogent Economics, 7(1), 1600462.

Setiawan, D et al (2016). Ownership structure and dividend policy in Indonesia. Journal of Asia Business Studies.

Shleifer, A. & Vishny, R. W. (1986). Large shareholders and corporate control. Journal of political economy, 94(3), 461-488.

Walter, J. E. (1956). Dividend policies and common stock prices. Journal of Finance, 11(1), 29-41.

Wei, Z et al (2011). Family control, institutional environment and cash dividend policy: Evidence from China. China Journal of Accounting Research 4(1-2), 29-46.

Xu’nan, F. (2011). Dividends and tunneling: Evidence from family firms in China. China Finance Review International.

Zeckhauser, R. J., & Pound, J. (1990). Are large shareholders effective monitors? An investigation of share ownership and corporate performance. In Asymmetric information, corporate finance, and investment (pp. 149-180). University of Chicago Press.




DOI: https://doi.org/10.24123/jmb.v21i2.561

Article Metrics

Abstract view : 0 times
PDF - 0 times

Refbacks

  • There are currently no refbacks.




Copyright (c) 2022 Cynthia Valentina

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License. ISSN: 1412-3789. e-ISSN: 2477-1783.

Google Scholar Google Scholar GARUDA - Garba Rujukan Digital
GARUDA - Garba Rujukan Digital
ROAD ROAD  
mabis statistics