To see the other types of publications on this topic, follow the link: Institutional investors. Dividends. Stock ownership.
Journal articles on the topic 'Institutional investors. Dividends. Stock ownership'
Create a spot-on reference in APA, MLA, Chicago, Harvard, and other styles
Consult the top 50 journal articles for your research on the topic 'Institutional investors. Dividends. Stock ownership.'
Next to every source in the list of references, there is an 'Add to bibliography' button. Press on it, and we will generate automatically the bibliographic reference to the chosen work in the citation style you need: APA, MLA, Harvard, Chicago, Vancouver, etc.
You can also download the full text of the academic publication as pdf and read online its abstract whenever available in the metadata.
Browse journal articles on a wide variety of disciplines and organise your bibliography correctly.
1
El-Nader, Ghaith. "Does stock ownership impact liquidity and dividends?" Investment Management and Financial Innovations 15, no. 3 (July 23, 2018): 111–21. http://dx.doi.org/10.21511/imfi.15(3).2018.09.
Full textAbstract:
This study investigates the interactions among stock ownership, liquidity and dividends in the UK stock market over the period 2002–2016. Using different liquidity measures, it is shown that stocks with higher levels of free float (institutional ownership) are associated with higher (lower) levels of liquidity. In addition, a positive and significant relation is found between institutional ownership and dividend payout policy, which, as a result, highlights the comparative tax advantages that UK institutions have for dividend income. These relations hold even after controlling for firm-specific characteristics. Finally, a negative relation is found between dividends and liquidity, implying that investors with less (more) liquid stocks are more (less) likely to receive dividend payments.
2
Kim, Dong H. "The effect of share ownership structure on ex-dividend day stock price behavior." Managerial Finance 45, no. 6 (June 10, 2019): 744–59. http://dx.doi.org/10.1108/mf-10-2017-0433.
Full textAbstract:
Purpose The purpose of this paper is to explore whether share ownership structure plays a role in determining the ex-day pricing of dividends. If share ownership structure, specifically the proportion of the firm’s stock held by individuals vs institutions, has an effect on the ex-dividend day stock price behavior, the ex-day premium is expected to be different for firms with different ownership structures. Design/methodology/approach To investigate whether the ex-day pricing of dividends is affected by the proportion of the firm’s stock held by individuals vs institutions, the author look into the ex-day premium. The ex-day premium is calculated by dividing the difference between the closing price on the cum-dividend day and the closing price on the ex-dividend day by the amount of the dividend. Findings Consistent with both the tax-based theory and the dynamic trading clientele theory, the author find that the ex-day premium decreases with the level of individual ownership. Consistent with the short-term trading theory, the author also find that the ex-day premium increases with the degree of investor heterogeneity, defined as the product of the proportion of the firm’s stock held by individual investors and the proportion held by institutional investors. Originality/value The author believe that this study contributes to the literature by providing useful evidence that share ownership structure affects the ex-day pricing of dividends, and thus this study will be of interest to the readers of managerial finance.
3
Tran, Thi Xuan Anh, and Quoc Tuan Le. "The Relationship between Ownership Structure and Dividend Policy: An Application in Vietnam Stock Exchange." Academic Journal of Interdisciplinary Studies 8, no. 2 (July 1, 2019): 131–46. http://dx.doi.org/10.2478/ajis-2019-0025.
Full textAbstract:
Abstract This research examines the possible association between ownership structure and Vietnam listed companies’ dividend payout policy over the period of 2009 – 2015. We have investigated 642 listed firms in Hochiminh stock exchange and Hanoi stock exchange, using pannel data analysis. Ownership structure is described with two main sub-variables: ownership concentration and ownership composition. Specifically, the Herfindahl index (or H-index) was applied to measure the level of ownership concentration /dispersion for all major shareholders in the company, including the five biggest investors, corporate institutional investors, the ownership concentration level, and foreign investors. It has been observed that the H-index of all major shareholders has an average of less than 0.5 but the value of the H-index of institutional investors at 0.594 indicates that institutional investors are more likely to be concentrated in the hands of large institutional investors. The result showed linear relationship between institutional ownership and the dividend rate, but not statistically significant for the relationship between managerial ownership and dividend payout ratio.
4
Wikartika, Ira, and Fajar Syaiful Akbar. "Pengaruh Kepemilikan Institusional, Konsentrasi Kepemilikan Dan Dividen Terhadap Kinerja Perusahaan." JBMP (Jurnal Bisnis, Manajemen dan Perbankan) 6, no. 1 (April 30, 2020): 69–75. http://dx.doi.org/10.21070/jbmp.v6i1.444.
Full textAbstract:
Improving company performance is crucial for the company's future life continuity. The company has a primary objective that increases the prosperity of shareholders. Basically, investors expect returns in the form of dividends. The structure of ownership and dividends is one way to improve the company's performance. This research aims to determine the influence of institutional ownership, ownership concentration, and dividends on the company's performance. The research methods used are quantitative methods using multiple linear regression analysis techniques. The research population uses companies listed on LQ45 in the Indonesia Stock Exchange. Sample research of 45 companies during the year 2018. The results showed that institutional ownership and ownership concentration did not affect the company's performance while dividends were influential in the company's performance.
5
El Houcine, Rim, and Adel Boubaker. "The Relation Between Stock Repurchase And Ownership Structure In France." International Journal of Accounting and Financial Reporting 3, no. 2 (October 11, 2013): 149. http://dx.doi.org/10.5296/ijafr.v3i2.4007.
Full textAbstract:
The aim of this article is to study the relationship between the type of shareholders of French companies and their stock repurchase policy. According to the financial theory, the presence of institutional investors negatively influences the policy of purchasing the fact of preference of these investors over the reinvestment projects. The theoretical hypotheses of interest alignment and entrenchment have been used to justify the relationship between management stockholding and repurchasing policy. We have tested the validity of our hypotheses on a sample of 77 French companies during 2003-2008. The results have shown that the institutional investors affect negatively the repurchase, which can explain the priority of these latter for dividends compared to repurchasing and with holding the profit to invest it again. Moreover, we have found a positive relationship between the management stockholding and the repurchase, which has been explained by the power of entrenchment that can perform the repurchase by raising the stockholding percentage of managers who repurchase the stocks.
6
Hussain, Atif. "The Impact of Dividend Policy on the Relationship Between Institutional Ownership and Stock Price Volatility: Evidence from Pakistan." Lahore Journal of Business 2, no. 1 (September 1, 2013): 111–32. http://dx.doi.org/10.35536/ljb.2013.v2.i1.a5.
Full textAbstract:
This study aims to determine the effects of dividend policy on the relationship between institutional ownership and stock price volatility, based on a sample of 36 firms listed on the Karachi Stock Exchange over a seven-year period (2005–11). We use a fixed-effects model applied to panel data to investigate this relationship and find that institutional ownership has a negative relation with stock price volatility and a positive relation with the dividend payout ratio. The results also show that dividend payouts significantly affect the relationship between institutional ownership and stock price volatility. The mediating role of dividend policy between institutional ownership and stock price volatility reveals that institutional investors prefer to invest in low-volatility dividend-paying stock.
7
Rohov, Heorhiy, Oleh Kolodiziev, Nataliya Shulga, Mykhailo Krupka, and Tetiana Riabovolyk. "Factors affecting the dividend policy of non-financial joint-stock companies in Ukraine." Investment Management and Financial Innovations 17, no. 3 (August 7, 2020): 40–53. http://dx.doi.org/10.21511/imfi.17(3).2020.04.
Full textAbstract:
Dividend policy, as part of corporate governance, is largely dependent on the institutional environment in which companies operate. The study aims to determine factors affecting dividend policy in the conditions of the Ukrainian underdeveloped stock market, legal insecurity of minority shareholders, high cost and concentration of capital. For this purpose, hypotheses about the impact of a company’s financial state, size, business risk, and ownership structure on dividend payments were tested using a sample of 58 Ukrainian non-financial public joint-stock companies and applying Interactive tree classification techniques (C&RT). The resulting classification model for predicting dividend decisions correctly classifies 92.86% of companies that paid dividends and 93.3% of companies that did not. The findings, based on the classification tree and importance scale, prove the hypothesis that companies in which individuals and institutional investors have a controlling interest are more likely to pay dividends than other non-state companies. The financial indicators accurately classify only those firms that do not pay dividends, and business risk does not affect classification accuracy at all. The paper substantiates the ways of using the study findings for economic regulation, protection of minority shareholders’ rights, and proliferation of modern corporate governance practices.
8
Taolin, Maximus Leonardo. "The DEBT POLICY AND OWNERSHIP STRUCTURE OF FIRM IN INDONESIA STOCK EXCHANGE." Inspirasi Ekonomi : Jurnal Ekonomi Manajemen 2, no. 2 (June 30, 2020): 1–16. http://dx.doi.org/10.32938/jie.v2i2.553.
Full textAbstract:
This study examines the effect of ownership structures (insiders ownership, shareholders dispersion and institutional investors) on debt policy. The variable that has a significant influence is institutional investors, while the insiders ownership variable has no significant effect but the direction of the inverse relationship with the debt ratio is in accordance with the theory. Shareholders dispersion variable does not have a significant influence and the direction of the relationship is not in accordance with the theory. These results indicate that the presence of institutional investors can reduce the role of debt in monitoring the behavior of managers, thereby reducing the total agency costs. Control variable. shows growth opportunities, firm size, asset structure and profitability affect the debt ratio and can be used as an instrument to support debt policy to minimize agency costs. Whereas dividend payments and tax rates are not. Using a sample of all companies listed on the Indonesia Stock Exchange other than insurance and financial companies with a research period between 2008 and 2011
9
Hardianto, Muhammad Bagas Syabana. "The Effect of Financial, Institutional and Managerial Ownership Factors on Dividend Policy of Manufacturing Companies in Consumer Goods Sector Listed on The Indonesia Stock Exchange in Period 2016-2019." Journal of Business and Management Review 2, no. 8 (August 16, 2021): 517–30. http://dx.doi.org/10.47153/jbmr28.1892021.
Full textAbstract:
Dividend payment is one of the rewards given by the company to investors for the time, risk, and commitment of a number of funds that have been given to the company. The distribution of dividends is generally carried out at the end of each financial reporting year and has obtained the approval of the General Meeting of Shareholders (RUPS). However, the distribution of company dividends is not mandatory, the agreement on the deal and certain factors. This study aims to identify the influence of financial factors and corporate governance (institutional ownership and managerial ownership) on company dividend policy. The type of data used in this research is quantitative data, which comes from secondary sources. The method used is purposive sampling with criteria, namely manufacturing companies in the consumer goods sector listed on the Indonesia Stock Exchange for the period 2016-2019. The data analysis technique used in this study is multiple linear regression with SPSS version 26 software. The results of this study indicate that financial factors such as profitability, company size, and company growth have an effect on dividend policy. Meanwhile, liquidity and leverage have no effect on dividend policy. In corporate governance, it is known that managerial ownership and ownership have no effect on dividend policy.
10
Pieloch-Babiarz, Aleksandra. "Diversified Ownership Structure and Dividend Pay‑outs of Publicly Traded Companies." Acta Universitatis Lodziensis. Folia Oeconomica 6, no. 345 (December 30, 2019): 93–110. http://dx.doi.org/10.18778/0208-6018.345.05.
Full textAbstract:
The aim of this article is to identify and characterise the relationship between the ownership structure and dividend pay‑out of listed companies. The research hypothesis states that along with an increase in a degree of ownership concentration both the propensity to pay a dividend and its amount increase. The research has been conducted on a group of 354 non‑financial companies listed on the Warsaw Stock Exchange. The basic research method is the analysis of logistic and tobit regression. The research shows that along with an increase in the complexity of the ownership structure, the share of the State Treasury, institutional investors and board members, decisions on dividend pay‑out are made more often, and the amount of dividend is higher. Examining the degree of ownership concentration expressed by the Herfindahl‑Hirschman index, diversified results have been obtained. An estimation of some regression models shows that stronger ownership concentration favours the decision to pay a dividend (dividends are paid out more frequently), however, as a degree of ownership concentration increases, a decrease in the amount of dividend is observed.
The research results presented in this article are a supplement to the existing analyses carried out on the global markets and an extension of the existing research conducted on the companies listed on the Warsaw Stock Exchange.
11
Kusumaningrum, Enggar Bayu, Hasna Noor Alifa, and Amrie Firmansyah. "STOCK RETURN IN INDONESIA BANKING COMPANIES: INVESTMENT DECISIONS, DIVIDEND POLICY, INSTITUTIONAL OWNERSHIP, INTEREST RATE." JURNAL TERAPAN MANAJEMEN DAN BISNIS 7, no. 1 (March 29, 2021): 12. http://dx.doi.org/10.26737/jtmb.v7i1.2327.
Full textAbstract:
<p>This study aims to determine the effect of investment decisions, dividend policy, institutional ownership, and interest rates on stock returns. This research is a quantitative study using secondary data and multiple regression analysis methods. Data was sourced from <a href="http://www.idx.com/">www.idx.com</a> and finance.yahoo.com consist of data and information from company financial statements and stock prices. Purposive sampling was chosen as the sampling method and obtained 35 banking companies for three years, so the total sample is 105 firm-year. The results suggest that investment decisions, dividend policy, and institutional ownership are not associated with stock returns, while interest rates negatively affected stock returns. This study indicates that banking companies make significant innovations in their products so that the investment objective is to support the company's operational activities and increase company value from investors' perspective.</p>
12
Kuhlmann, Sebastian, and Joachim Rojahn. "The impact of ownership concentration and shareholder identity on dividend payout probabilities: New evidence from the German stock market." Corporate Ownership and Control 15, no. 1 (2017): 18–32. http://dx.doi.org/10.22495/cocv15i1art2.
Full textAbstract:
Numerous studies analyse the impact of ownership concentration and shareholder identity on dividend payout probabilities. In this paper, we seek to provide additional information about the importance different ownership proxies have for dividend payments. Because the importance of those proxies varies with the classification techniques applied, we use both traditional and machine learning techniques. We examine the dividend payout behaviour of German issuers, which is considered rather flexible in terms of its distribution frequencies and dividend yields compared to international practice. Our sample period covers the years 2007 to 2014. Despite considerable differences in the classification techniques applied, we find that previous years’ dividend payments, corporate profitability and firm size are consistently the most important firm-specific determinants of dividend payout probabilities. Only the largest shareholders with equity stakes that are either between 25% and 50% or above 50% rank among the most important variables. The impact is nonlinear. When controlling for shareholders’ identities, we find that both financial institutional and managerial ownership are especially important. Taking the location of institutional investors into account, only foreign financial investors influence payout probabilities.
13
Rahmawati, Christina Heti Tri. "Struktur Kepemilikan, Profitabilitas, dan Nilai Perusahaan: Mediasi Kebijakan Deviden." Jurnal Inspirasi Bisnis dan Manajemen 4, no. 1 (July 5, 2020): 1. http://dx.doi.org/10.33603/jibm.v4i1.3362.
Full textAbstract:
Abstract. This research aims to investigate the influence of insider and institutional ownership, profitability towards firm value through dividend payout ratio as the intervening variable. The research method was quantitative research. The samples employed were the manufacturing companies registered in Indonesia Stock Exchange 2016-2018. The statistic method was analyzed by path analysis. The results of this research showed that insider ownership brought significant negative influence towards the firm value; the profitability brought significant positive influence towards the firm value and the dividend payout ratio brought significant positive influence towards the firm value. The intervening testing results proved the dividend payout did not intervene in the influence of the insider and institutional ownership towards the firm value, and the dividend intervened in the influence of profitability towards the firm value. The research implication for investors includes the drastic increase in profit and benefits. Meanwhile, for companies, they could enhance the insider share ownership and performance to earn optimum profitability and dividend that could boost the firm’s value and grab more investors. Keywords: Insider Ownership; Institutional Ownership; Profitability; Firm Value; Dividend Payout Ratio. Abstrak. Penelitian ini bertujuan menguji pengaruh kepemilikan manajerial, kepemilikan institusional dan profitabilitas terhadap nilai perusahaan melalui kebijakan deviden sebagai variabel mediasi. Metode penelitian yang digunakan adalah penelitian kuantitatif. Sampel yang digunakan adalah perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia tahun 2016-2018. Metode statistik untuk menguji hipotesis menggunakan analisis jalur. Hasil penelitian menunjukkan kepemilikan manajerial berpengaruh negatif signifikan terhadap nilai perusahaan; profitabilitas dan kebijakan deviden berpengaruh positif signifikan terhadap nilai perusahaan serta kebijakan deviden berpengaruh positif signifikan terhadap nilai perusahaan. Sedangkan hasil uji mediasinya membuktikan kebijakan deviden tidak memediasi pengaruh kepemilikan manajerial dan kepemilikan institusional terhadap nilai perusahaan;serta kebijakan deviden memediasi pengaruh profitabilitas terhadap nilai perusahaan. Implikasi penelitian ini bagi investor dapat memilih perusahaan dengan tingkat laba yang tinggi sehingga menerima keuntungan tinggi. Sedangkan bagi perusahaan dapat meningkatkan kepemilikan saham manajerial dankinerja perusahaan agar menghasilkan profitabilitas yang optimal serta dividen yang tinggi, sehingga meningkatkan nilai perusahaan dan menarik investor. Kata kunci: Kepemilikan Manajerial; Kepemilikan Institusional;Profitabilitas; Nilai Perusahaan; Kebijakan Deviden.
14
Eriandani, Rizky. "Pengaruh Dimensi Pengungkapan Corporate Social Responsibility Terhadap Future Institutional Ownership." Jurnal Ekonomi dan Bisnis 17, no. 1 (June 18, 2016): 91. http://dx.doi.org/10.24914/jeb.v17i1.241.
Full textAbstract:
<em>Corporate social responsibility practice becomes important subject in company`s activity, because it will affect the company's reputation. Besides, institutional investors likely prefer to invest in companies that have a social responsibility as it is considered to increase the legitimacy and future performance. This study aims to investigate the effect of CSR disclosure on institutional ownership. We use percentages ownership to measure institutional ownership. CSR measurement instrument used in this study adopted a previous research. The instrument comes from research Hackston and Milne, which was adjusted with Bapepam regulation in Indonesia. We also divided CSR disclosures in four sub-dimensions. The samples used in this research were 115 listed agriculture, mining, and manufacturing companies in indonesian Stock Exchange which studied during the years of 2010. Using SPSS 20, The analysis methods of this research used multiple regression analysis. Studies shows that not all dimensions of CSR disclosure effect on institutional ownership. Only product dimensions of CSR disclosures has a significant positive impact on institutional ownership. However, this paper fail to find any significant impact of another CSR dimensions. Thus, our study suggests that the dimensions of the product can affect investment decisions. In contrast, institutional investors have not focused on environment, employee relation, and community activities in investment decisions.</em>
15
Al-Malkawi, Husam-Aldin Nizar. "Ownership structure, firm-specific factors and payout policy: Evidence from the GCC region." Corporate Ownership and Control 15 (2017): 476–86. http://dx.doi.org/10.22495/cocv15i1c2p16.
Full textAbstract:
This paper draws on the author’s previously published works. The purpose of this study is to examine the effect of ownership structure and firm-specific factors on the payout policy of firms listed on the largest stock market in the Gulf Cooperation Council (GCC) region namely the Saudi Stock Exchange (SSE). The paper uses a balanced panel dataset of 69 nonfinancial companies (552 firm-year observations) and employs the random effects Tobit specification. The results show that government, institutional and family ownership positively influence dividend payments in Saudi Arabia. Furthermore, dividend payments are positively associated with firm-specific factors such as profitability, firm size and firm maturity but negatively related to business risk and leverage. The findings are consistent with the agency costs and reputation hypotheses. The paper provides some practical implications for the Capital Market Authority of Saudi Arabia (CMA), corporations and investors.
16
Polimpung, Lisa J. C. "Pengaruh Good Corporate Governance Terhadap Kualitas Laba Perusahaan (Studi pada Perusahaan Sektor Consumer Goods dalam Bursa Efek Indonesia Periode 2016-2018)." Jurnal Akuntansi 12, no. 2 (October 26, 2020): 215–22. http://dx.doi.org/10.28932/jam.v12i2.2305.
Full textAbstract:
Financial statements reflect the state of the company where in a financial statement a person can get various kinds of information where one of them is profit. Before investors make an investment they will use information about earnings for their consideration. This causes earnings quality to be one of the most important aspects because it is used in evaluation materials to measure the performance of a company because investors expect quality earnings. Earnings quality is one of the driving factors used by investors before making investment decisions. This study wants to see whether the variables contained in good corporate governance which are divided into managerial ownership, institutional ownership, the size of the public accounting firm, audit committee and committee board have an influence on the quality of corporate earnings. This study conducted a study of companies listed on the Indonesia Stock Exchange in the period 2016-2018 where the number of observations was 60 observations and examined using the calculation of the coefficient of determination and multiple regression. The results found are managerial ownership and audit committee have an influence on earnings quality while other variables have no influence.
Keywords: Good Corporate Governance, Earning Quality
17
Adawi, Mohamed, and Kami Rwegasira. "Corporate governance and firm valuation in emerging markets: evidence from UAE listed companies in the Middle East." Corporate Ownership and Control 11, no. 1 (2013): 637–56. http://dx.doi.org/10.22495/cocv11i1c7art3.
Full textAbstract:
There has been previous empirical research on corporate governance and board of directors which focused on attempting to find a direct relationship between internal governance variables and firm valuation. It has however also been argued that there are differences in the nature, direction, magnitude and processes of operation of this relationship between developed and developing financial markets because of differences in their respective economic, social, regulatory framework and market behaviour . This study examines this relationship in the context of the United Arab Emirates (UAE) as one of the emerging markets in order to extend evidence further beyond the western developed capital markets into the Middle East. Does the prevalence of family-ownership in the UAE for example matter to the company valuation? What about the presence of institutional ownership or ownership concentration? And do the corporate communication and disclosure scores published by the UAE Institutional Investor in cooperation with Hawkamah, The Institute for Corporate Governance; have any relationship to corporate valuation? More specifically this study, using multiple regression analysis, examines the impact of firm level internal corporate governance indicators namely board structure, ownership structure, and transparency and disclosure governance practices on the valuation of listed companies in the UAE after controlling for company size, industry, leverage, and dividend payout using Tobin’s Q, Price - Earning Ratio (PER) and Price - Book Value Ratio (PBVR) as surrogates for company valuation. The results show no significant relationship between internal corporate governance indicators and company valuation when using Tobin’s Q and PBR as measures of company valuation. However they reveal statistically significant links between some of the internal corporate governance indicators on the one hand and company market valuation on the other when company valuation is measured by the price earnings ratio (PER) which is one of the most common and important stock market indicators for investors. These results suggest that the company valuation measures like the price earnings ratio which explicitly reflects the financial markets assessment of the firm investment and dividend policies lead to a better correlation with internal corporate governance indicators. Moreover, the regression results indicate that the frequency of board meetings, adoption of best transparency practices and the presence of private institutional investors such as sovereign wealth funds are the most significant internal corporate governance variables in accounting for differences in company market values in the UAE. The structural aspects of the board such as size and composition turned out not to be statistically significant in their impact on company valuation.
18
Makhaiel, Nargis, and Michael Sherer. "In the name of others: an investigation of earnings management motives in Egypt." Journal of Accounting in Emerging Economies 7, no. 1 (February 6, 2017): 61–89. http://dx.doi.org/10.1108/jaee-12-2013-0059.
Full textAbstract:
Purpose Previous literature on earnings management (EM) indicates that managers are motivated to adjust reported income to serve their own self-interests, and to try and influence capital markets. However, previous research has failed to provide an appropriate theoretical underpinning for EM and has ignored the effect of cultural and environmental factors on shaping managers’ motivations. Therefore the purpose of this paper is to draw on interpretive methodology and new institutional sociology (NIS) theory to identify the external factors that motivate managers of Egyptian companies to use EM to modify financial statements. Design/methodology/approach The research adopted an interpretative methodology and interview methods. Interviewees were conducted with 34 participants, who were divided into four different categories; executives, financial analysts, auditors and stock exchanges’ authorities. Findings This paper provides empirical evidence on the range of external factors that motivate Egyptian corporate executives to adjust the earnings number in financial statements. These external factors include the expectations of investors, lenders and employees, the impact of stock exchange listing rules, beating an earnings target, and the privatisation of key state-owned companies. Research limitations/implications The authors recognise that the paper has a number of limitations. The research is concerned solely with EM in Egypt and, therefore, it would not be safe to generalise the results to other contexts, even in the Middle East. Further research on the behaviour of managers towards EM in other countries would be useful to test validity of the results reported in this paper. Originality/value The principal contribution of this paper is to build on the previous EM literature to include external factors within the Egyptian context which motivate Egyptian managers to manage the earnings of companies in an upward direction. It adds additional EM motives to available literature including: employees, stock exchange’s rules, privatisation and meeting industrial norms. Also, the paper provides evidence of the effect of concentrated share ownership on managers’ likelihood to engage in EM behaviour. The paper also extends NIS theory to recognise the importance of the interplay between institutional and economic environment by including economic reform, and non-financial providers as factors that can explain the EM behaviour.
19
Nguyen, Thao, and Hui Li. "Dividend Policy and Institutional Holdings: Evidence from Australia." International Journal of Financial Studies 8, no. 1 (March 3, 2020): 12. http://dx.doi.org/10.3390/ijfs8010012.
Full textAbstract:
This paper investigates the relationship between dividend payout and institutional ownership for all Australian listed firms in the period between 2001 and 2015. In our univariate tests, we find that institutional investors, in general, prefer dividend-paying firms more than non-paying firms, and for the dividend-paying firms in our sample, institutional investors hold more shares in the firms who pay higher dividends. We further explore the causality between dividend payout and institutional ownership in our multivariate tests with our panel data. The results show an insignificant effect of institutional ownership (dividend payout) on the future dividend payout (institutional ownership) while controlling for firms’ fundamentals, that a higher dividend yield does not attract more institutional investors and that there is no catering to Australian institutional investors.
20
Baker, H. Kent, and Imad Jabbouri. "How Moroccan institutional investors view dividend policy." Managerial Finance 43, no. 12 (December 4, 2017): 1332–47. http://dx.doi.org/10.1108/mf-06-2017-0215.
Full textAbstract:
Purpose The purpose of this paper is to examine how Moroccan institutional investors view dividend policy. It discusses the importance these investors attach to the dividend policy of their investee firms, how much influence they exercise in shaping investee firms’ dividend policies, their reactions to changes in dividends, and their views on various explanations for paying dividends. Design/methodology/approach A mail survey provides a respondent and firm profile and responses to 28 questions involving various explanations for paying dividends and 30 questions on different dividend issues. Findings Institutional investors attach substantial importance to dividend policy and prefer high dividend payments. Although liquidity needs are a major driver, taxes play little role in shaping dividend preferences. Respondents agree with multiple explanations for paying dividends giving the strongest support to catering, bird-in-the-hand, life cycle, signaling, and agency theories. Research limitations/implications Despite a high response rate, the number of respondents limits partitioning the sample and testing for significant differences between different groups. Practical implications The lack of communication between Casablanca Stock Exchange (CSE) listed firms and institutional investors may depress stock prices and increase volatility. The results suggest agency problems and a weak governance environment at the CSE. Originality/value This study documents the importance that institutional investors place on dividend policy, their reactions to changes in their investees’ dividend policy, and the methods used to influence these firms. It extends previous research by reporting the level of support Moroccan institutional investors give to various explanations for paying dividends.
21
Jebaraj Benjamin, Samuel, Mazlina Mat Zain, and Effiezal Aswadi Abdul Wahab. "Political connections, institutional investors and dividend payouts in Malaysia." Pacific Accounting Review 28, no. 2 (April 4, 2016): 153–79. http://dx.doi.org/10.1108/par-06-2015-0023.
Full textAbstract:
Purpose The purpose of this study is to examine the agency problem of expropriation using dividends in politically connected firms and the relevance of institutional investors in limiting this problem. The growing presence of this group of shareholders offers a unique opportunity to test their importance in the context of dividends payments and expropriation. Design/methodology/approach This study uses the Tobit regression to test the association between political connection, institutional investors and dividend payouts. The results are also robust to the three-stage-least squares regressions method. Findings The study is based on a random sample of 2,458 Malaysian firms-year observations for the period of 2004-2009. The results reveal that politically connected firms have an inclination to pay lower dividends, while institutional ownership is associated with higher dividend payouts. Furthermore, the findings reveal that higher levels of institutional ownership moderates the negative relationship between politically connected firms and dividends. Research implications The findings have an important implication to regulators as it suggests that the institutional investors can influence the dividend payouts in politically connected firms through active monitoring, thus alleviating agency problems. This also provides a positive feedback on the regulators’ governance initiatives that quest to strengthen the roles of institutional investors. Originality/value This study is the first to examine the effectiveness of the monitoring role of institutional investors in the context of expropriation by politically connected firms from the perspective of dividend payouts.
22
Murhadi, Werner Ria. "The Effects of Corporate Governance on Company Performance and Dividends in Three Asean Countries." Media Ekonomi dan Manajemen 36, no. 2 (July 1, 2021): 230. http://dx.doi.org/10.24856/mem.v36i2.2224.
Full textAbstract:
<p>This study aims to investigate the effects of corporate governance on company performance and dividends paid by the company. In developing countries where the protection system against public investors is still weak, corporate governance becomes important. This study uses a sample of manufacturing companies in three developing countries. i.e., Indonesia, Malaysia, and Thailand. The variables that represent corporate governance are board characteristics and ownership structure. Board characteristics comprise board size, independent board, and board gender, while the ownership structure uses managerial ownership and institutional ownership. The results show that in Indonesia, corporate governance has no significant effect on company performance and dividends. In comparison, in Malaysia, the female board has a positive effect on both performance and dividends paid. Whereas in Thailand, institutional ownership has a negative effect both on performance and dividends paid. The results also consistently show that debt and company size have an effect on performance and dividends in the three countries.</p>
23
Song, Xiaobao, and Wenjia Zheng. "Ownership structure, stock volatility and analyst independence." China Finance Review International 4, no. 2 (May 13, 2014): 187–208. http://dx.doi.org/10.1108/cfri-07-2013-0101.
Full textAbstract:
Purpose – The purpose of this paper is to examine securities analyst independence in China's capital market and the effect on analyst independence of institutional investors’ shareholding and separation between control rights and cash flow rights of ultimate controller. Design/methodology/approach – Using data of China's listed companies from 2006 to 2012, the authors empirically tested the relationship between analyst following and volatility of stock return. And based on the test, the authors investigated the role played by institutional investors’ ownership and separation between control rights and cash flow rights of ultimate controller. Findings – According to the empirical results, there is a significant negative correlation between analyst following and volatility of stock return. Also, shareholding of institutional investors and the separation between control rights and cash flow rights of ultimate controllers will have an impact on the relationship between analyst following and volatility of stock return. When institutional investors hold higher proportion or the separation between control rights and cash flow rights of ultimate controllers keeps at a high level, the negative correlation between analyst following and volatility of stock return will weaken. Originality/value – First, based on the theory of market intermediation, the paper examined analyst independence by investigating and analyzing the relationship between analyst following and volatility of stock return. Second, it analyzed the factors affecting analyst independence by integrating enterprise characteristic variable and market characteristic variable on the basis of introducing two variables – shareholding of institutional investors and the separation between control rights and cash flow rights of ultimate controllers.
24
Moser, William J., and Andy Puckett. "Dividend Tax Clienteles: Evidence from Tax Law Changes." Journal of the American Taxation Association 31, no. 1 (March 1, 2009): 1–22. http://dx.doi.org/10.2308/jata.2009.31.1.1.
Full textAbstract:
ABSTRACT: We investigate institutional investors' preference for dividend-paying stocks following changes in the dividend tax penalty during the sample period from 1987 until 2004. Following prior literature we separate institutions into tax-advantaged and taxable cohorts and find that when the dividend tax penalty is positive, high-dividend firms constitute a significantly larger (smaller) percentage of tax-advantaged (taxable) institutions' portfolios. Multivariate regressions involving institutional ownership levels and changes confirm our initial findings. We estimate (for the median dividend-paying firm) when the dividend tax penalty decreases by 23.3 percent, we expect tax-advantaged (taxable) institutional ownership will decrease by 0.36 percent (increase by 0.25 percent) of a firm's shares outstanding. We find our results are robust for a subsample of firms that do not change their dividend policy. Overall, our paper provides strong support for the existence of institutional dividend tax clienteles.
25
Jory, Surendranath R., Thanh Ngo, and Hamid Sakaki. "Institutional ownership stability and dividend payout policy." Managerial Finance 43, no. 10 (October 9, 2017): 1170–88. http://dx.doi.org/10.1108/mf-09-2016-0272.
Full textAbstract:
Purpose The purpose of this paper is to empirically examine the link between institutional ownership stability and dividend payout ratio. Design/methodology/approach First, the authors estimate the propensity of a firm to pay dividend. Next, the authors perform panel fixed-effect regressions of dividend payouts on institutional ownership stability variables. The authors also compare institutional ownership between dividend paying and non-dividend paying investee firms. The authors analyze the dividend preferences of different types of institutional owners. Finally, the authors examine the cross-sectional variation in the volatility of dividend payouts. Findings The authors find that stable and large institutional owners favor dividend paying companies. There also exists a positive association between ownership persistence and dividend payout. Conversely, firms that change their dividend payout frequently are associated with larger deviations in institutional ownership. Additionally, the presence of pressure-sensitive institutional investors (i.e. investors that also hold business ties with the investee firm) is significantly linked to dividend payout policy. Conversely, pressure-insensitive investors use alternative forms of monitoring instead of requiring investee firms to pay dividends, which serve to reduce agency conflicts. Originality/value This paper considers the preferences of long-term stable institutional investors in their selection of dividend paying firms.
26
Tee, Chwee Ming, Angelina Seow Voon Yee, and Aik Lee Chong. "Institutional Investors’ Monitoring and Stock Price Crash Risk: Evidence from Politically Connected Firms." Review of Pacific Basin Financial Markets and Policies 21, no. 04 (December 2018): 1850028. http://dx.doi.org/10.1142/s0219091518500285.
Full textAbstract:
Motivated by recent studies on political connections and stock price crash risk, this study investigates whether there is an association between politically connected (POLCON) firms and stock price crash risk. Further, we examine whether institutional investors’ ownership can moderate this association. Using a dataset of Malaysian firms for the period 2002–2012, we show that POLCON firms are associated with higher risk of stock price crashes. However, the positive association between POLCON and stock crashes is attenuated by higher institutional ownership, implying effective monitoring. Finally, we find that only local institutional investors can significantly mitigate the positive association between POLCON firms and stock price crash risk. This suggests that different types of institutional investors can produce different monitoring outcomes in POLCON firms.
27
Nursyahbandarmahdi, Novia, Siti Sarah, and Luciana Haryono. "StrukturKepemilikan Institusional, Koneksi Politik dan Kebijakan Dividen Perusahaan di Bursa Efek Indonesia." Studi Akuntansi dan Keuangan Indonesia 3, no. 1 (June 15, 2020): 120–44. http://dx.doi.org/10.21632/saki.3.1.120-144.
Full textAbstract:
The purpose of this study was to determine whether institutional ownership, political connections, and institutional ownership on political connected companies affects the dividend policy of Indonesian companies listed on the Indonesian Stock Exchange from 2012 - 2017. The sample used in this study were totaled to 255 non-financial companies in Indonesia with total observations of 1530. The model used on this study was the Tobit regression model. The results show that institutional ownership has the tendency to not pay dividends, whereas political connections on companies tends to support the payment of dividends to the shareholders. Furthermore, this study found that when there is the presence of interactions between political connections and institutional ownership in the company, political connections tends to have a positive impact towards dividend policy, yet institutional ownership has an increasingly significant negative effect on dividend policy.
28
Obaidat, Ahmad N. "Ownership Structure and Dividends Policy: Emerging Market Evidence." International Business Research 11, no. 6 (May 8, 2018): 65. http://dx.doi.org/10.5539/ibr.v11n6p65.
Full textAbstract:
This study investigated the effect of ownership structure on the dividend policy of the financial firms listed on Amman Stock Exchange (ASE) for the period 2014-2016. The results indicated a positive relationship between dividend and institutional, managerial, and foreign ownership, and negative relationship between dividend and ownership concentration. The result also indicated that a large portion of the ownership is in the hand of the instructions and the board of directors, and the ownership is not highly concentrated.
29
Tee, Chwee Ming. "Political connections, institutional investors monitoring and stock price synchronicity." Managerial Finance 43, no. 11 (November 13, 2017): 1236–53. http://dx.doi.org/10.1108/mf-03-2017-0099.
Full textAbstract:
Purpose The purpose of this paper is to examine the association between politically connected (POLCON) firms and stock price synchronicity, and whether this association can be attenuated by institutional investors. Design/methodology/approach This paper uses an ordinary least square regression model to examine the association between POLCON firms and stock price synchronicity; institutional ownership and stock price synchronicity; the moderating role of institutional ownership on the association between POLCON firms and stock price synchronicity; institutional domiciles and stock price synchronicity; and the moderating role of institutional domiciles on the association between POLCON firms and stock price synchronicity. Findings The result shows that POLCON firms are positively associated with stock price synchronicity. Further, the author also finds that institutional monitoring, through higher ownership by local institutional investors is associated with lower stock price synchronicity. In addition, this study documents evidence that institutional investors, particularly local institutional investors can improve stock price informativeness in POLCON firms. Research limitations/implications The results suggest that POLCON firms are plagued by severe agency problems, resulting in limited flow of firm-specific information to the capital markets. However, the author shows that POLCON firm’s agency problems can be attenuated through effective monitoring by institutional investors. Further, institutional domiciles are shown to be significantly associated with stock price synchronocity. However, effective monitoring is largely driven by local institutional investors, in line with the geographical proximity theory. Practical implications The results suggest that regulators should increase their surveillance and monitoring effort, particularly on firms with close ties to the government. In particular, POLCON firms should be required to be more transparent in their corporate dealings. Additionally, auditors should intensify their audit efforts on POLCON firm to provide more reliable financial information to minority shareholders, investors and analysts. Finally, institutional investors should be incentivized by the Malaysian Securities Commission, via, the code of governance to play an effective monitoring role in Malaysian firms. Originality/value This study reveals that POLCON firms’ severe agency problems can be alleviated by effective institutional monitoring. Further result identifies institutional domiciles as a significant factor in influencing monitoring effectiveness in POLCON firms. This paper provides insights into the dynamic interaction between political connections, institutional monitoring, firm governance and capital markets behavior of an emerging market.
30
Ruzhanskaya, L., and S. Lukyanov. "Dividend Policy of Russian Companies and the Investors Interests." Voprosy Ekonomiki, no. 3 (March 20, 2010): 132–46. http://dx.doi.org/10.32609/0042-8736-2010-3-132-146.
Full textAbstract:
The paper concentrates on revealing basiс factors causing parameters of dividend policy. Analyzing practice of the Russian corporations, the authors conclude that, despite irregularity and in most cases refusal of payments by joint-stock companies, it is possible to determine similar features with the companies from the developed countries: concentration of dividends and circulation of the buy-back. Specific characteristics of dividend policy have become a consequence of poor quality of institutions leading to significant agency costs in firms: debt is not an essential restriction for payments of dividends; the effect of smoothing dividends is absent, the structure of ownership influences payments; large profitable companies pay dividends, also as a substitute for bad quality of corporate governance. Incentives of large shareholders reserving control over the companies are the main factor defining decisions on payment and the size of dividends.
31
Aloui, Mouna, and Anis Jarboui. "Does domestic institutional ownership increase return volatility? The French context." International Journal of Law and Management 61, no. 2 (April 4, 2019): 421–33. http://dx.doi.org/10.1108/ijlma-10-2017-0249.
Full textAbstract:
Purpose The purpose of this study is to examine the impact of domestic ownership on the stock return volatility. The authors use a detailed panel data set of 89 French companies listed on the SBF 120 over the period 2006-2013. The empirical results show that the domestic institutional investors have low stock price volatility in the French stock market. This result implies the stabilizing factor of domestic investors in France stock markets, which can be considered as one of the potential favor of growing the exhibition of domestic stock markets to institutional investors. This study employs a variety of econometric models, including feedbacks, to test the robustness of our empirical results. Design/methodology/approach To explain the relation between stock return volatility and domestic institutional investors (DIIs), the authors used two complementary methods: two-step generalized method of moments analysis as well as panel vector autoregressive framework and two-stage least squares (2SLS) method. Findings The authors’ empirical results show that the proportion of DIIs with advanced local degrees stabilizes the stock price volatility. However, firm’s size and the turnover have a positive effect on the volatility of the stock returns. This result is consistent with the hypothesis that the firm’s size and the turnover will increase price volatility during a financial crisis as a result of the deterioration of the monitoring mechanism and the reduction of the investors’ confidence in firms. Originality/value This result also indicates that the variables (the firm’s size, total sales and debt ratio) are poor corporate governance and have a role in the increased the stock return volatility.
32
Diez-Esteban, José María, and Óscar López-de-Foronda. "Dividends and institutional investors activism: Pressure resistant or pressure sensitive?" Corporate Ownership and Control 6, no. 1 (2008): 38–43. http://dx.doi.org/10.22495/cocv6i1p4.
Full textAbstract:
This paper provides new international evidence on the relationship between dividend policy and institutional ownership by analysing a sample of US and UK and Irish firms characterised by an Anglo-Saxon tradition and a matching sample of other EU companies from Civil Law legal systems. We hypothesize that, due to the different characteristics of both the legal system and the nature of agency conflicts in firms from those countries, the type of institutional investors and their role in corporate governance is different and so the use of dividend policy to solve the conflict of corporate governance problem differs in each legal system. We find that while in firms from Anglo-Saxon tradition the relation between dividends and institutional investors, pension and investment funds, is possitive, in Civil Law countries the relation is negative where investors are banks or insurance companies with other private interest inside the firm. These results are consistent with our hypotheses and breed new insights into the role of dividend policy as a disciplining mechanism in firms from different legal system with an important presence of institutional investors
33
Ajina, Aymen, Faten Lakhal, and Danielle Sougné. "Institutional investors, information asymmetry and stock market liquidity in France." International Journal of Managerial Finance 11, no. 1 (February 2, 2015): 44–59. http://dx.doi.org/10.1108/ijmf-08-2013-0086.
Full textAbstract:
Purpose – The purpose of this paper is to examine the effect of institutional investors’ ownership and type on information asymmetry and stock market liquidity in France. Design/methodology/approach – The sample includes 162 French-listed firms from 2007 to 2009. The methodology relies on linear regressions using the method of ordinary least square. Before examining the interaction between liquidity and institutional investors, the authors check for the existence of the endogeneity problem by applying the Durbin-Wu-Hausman test of Davidson and MacKinnon (1993). The results of the endogeneity test show that institutional investors’ ownership and stock liquidity are endogenous. A simultaneous equation model using the double least square method is then tested to address this problem. Findings – The findings show that the proportion of institutional investors has a positive and significant effect on stock-market liquidity, which confirms the signal theory and trading hypothesis. These investors perform high trading activity which favorably affects market liquidity. The results also show that pension funds improve stock liquidity. This result suggests that pension funds manage huge assets decreasing transaction costs and improving liquidity. They display a positive signal to the market about more transparency and a low level of informational asymmetry. Practical implications – These results highlight the institutional investors’ role in defining the level of liquidity on the French market. The findings also stress the relevance of developing institutional investors’ demand for the Paris market in order to better assess firm value, protect minority ownership and improve market liquidity. Originality/value – In the French institutional setting, institutional investors act as a control device since minority shareholder interests are less protected than in Anglo-American counterparts. This result highlights the significant role of institutional investors in corporate governance structures and on financial markets. Their presence is a guarantee for minority interest protection and for more liquid stocks.
34
Ali, Muhammad Sadil, and Shujahat Haider Hashmi. "Impact of Institutional Ownership on Stock Liquidity: Evidence from Karachi Stock Exchange, Pakistan." Global Business Review 19, no. 4 (May 15, 2018): 939–51. http://dx.doi.org/10.1177/0972150918772927.
Full textAbstract:
This study empirically investigates the impact of institutional ownership on stock liquidity; we used a sample size of 84 non-financial companies listed on Karachi Stock Exchange (KSE). Data were gathered for the period of 10 years, starting from 2005 to 2014. This study employs turnover ratio to measure stock liquidity while institutional ownership is measured by dividing number of shares kept by institutions from total number of outstanding shares. The fixed effect model shows that the degree of stock liquidity in Pakistani-listed firms tend to significantly increase for the firms where institutions hold a significant amount of share of that particular firm. This study also finds that ownership by bank and investment companies are positively associated with liquidity, while relationship between ownership by insurance companies and stock liquidity is found to be insignificant. Our evidence supports that many but not all institutional investors play a positive role to improve stock liquidity in Pakistani capital market. The results of this study are important for dealers, traders and brokers, in the sense that they can facilitate investors in efficient resource allocation.
35
Jacob, Chacko, and Jijo Lukose P.J. "Institutional Ownership and Dividend Payout in Emerging Markets: Evidence from India." Journal of Emerging Market Finance 17, no. 1_suppl (February 23, 2018): S54—S82. http://dx.doi.org/10.1177/0972652717751538.
Full textAbstract:
We examine the relationship between institutional investor ownership and dividend payouts using a large sample of NSE-listed non-financial firms during the period 2001 to 2016. Consistent with the evidence from the US market, institutional investors, on average, have larger holdings in dividend-paying firms and are seen to prefer dividend payers over non-payers among larger firms. However, among smaller firms, institutional investors seem to prefer non-paying firms. Consistent with it, logistic regression results reveal that institutional investors do improve a firms’ propensity to pay dividends, primarily across large firms. Further, among dividend-paying firms, institutional investors, on average, are observed to have relatively lesser holdings in firms with higher payouts than those with lower payouts. In line with these observations, regression analysis also provides no evidence to support a positive relationship between total institutional ownership and payout level. However, across investor categories, we do find evidence for domestic institutional investors (DII) in improving payouts. Further, we use a dynamic panel GMM estimator to correct for endogeneity and find that the relationship is robust among large firms. Our results highlight the role of DII in improving dividend payout and provide support to models that predict a positive relationship. JEL Classification: G23, G32, G34, G35
36
Hsieh, Jim, and Qinghai Wang. "Insiders' Tax Preferences and Firms' Choices between Dividends and Share Repurchases." Journal of Financial and Quantitative Analysis 43, no. 1 (March 2008): 213–44. http://dx.doi.org/10.1017/s0022109000002805.
Full textAbstract:
AbstractThis paper investigates whether corporate payout policy is associated with insiders' share holdings and their tax preferences. We find that insider ownership and the implied tax liabilities are positively related to a firm's propensity to employ share repurchases. Firms with higher levels of or greater increases in insider ownership prefer stock repurchases to cash dividends. This relation is more significant in years when dividends were more tax disadvantaged relative to capital gains. Our findings are robust to the endogeneity of insider ownership and the inclusion of various control variables such as firm size, permanence of cash flows, growth opportunities, institutional ownership, and executive stock options. Overall, our results suggest that personal tax considerations from insiders affect corporate payout decisions.
37
Al-Najjar, Basil, and Erhan Kilincarslan. "The effect of ownership structure on dividend policy: evidence from Turkey." Corporate Governance: The International Journal of Business in Society 16, no. 1 (February 1, 2016): 135–61. http://dx.doi.org/10.1108/cg-09-2015-0129.
Full textAbstract:
Purpose This paper aims to investigate the impact of ownership structure on dividend policy of listed firms in Turkey. Particularly, it attempts to uncover the effects of family involvement (through ownership and board representation), non-family blockholders (foreign investors, domestic financial institutions and the state) and minority shareholders on dividend decisions in the post-2003 period as it witnesses the major economic and structural reforms. Design/methodology/approach The paper uses alternative dividend policy measures (the probability of paying dividends, dividend payout ratio and dividend yield) and uses appropriate regression techniques (logit and tobit models) to test the research hypotheses, by focusing on a recent large panel dataset of 264 Istanbul Stock Exchange-listed firms (non-financial and non-utility) over a 10-year period 2003-2012. Findings The empirical results show that foreign and state ownership are associated with a less likelihood of paying dividends, while other ownership variables (family involvement, domestic financial institutions and minority shareholders) are insignificant in affecting the probability of paying dividends. However, all the ownership variables have a significantly negative impact on dividend payout ratio and dividend yield. Hence, the paper presents consistent evidence that increasing ownership of foreign investors and the state in general reduces the need for paying dividends in the Turkish market. Research limitations/implications Because of the absence of empirical research on how ownership structure may affect dividend policy and the data unavailability for earlier periods in Turkey, the paper cannot make comparison between the pre-and post-2003 periods. Nevertheless, this paper can be a valuable benchmark for further research. Practical implications The paper reveals that cash dividends are not used as a monitoring mechanism by investors in Turkey and the expropriation argument through dividends for Turkish families is relatively weak. Accordingly, the findings of this paper may benefit policymakers, investors and fellow researchers, who seek useful guidance from relevant literature. Originality/value To the best of the authors’ knowledge, this paper is the first to examine the link between ownership structure and dividend policy in Turkey after the implementation of major reforms in 2003.
38
Li, Oliver Zhen. "Taxes and Valuation: Evidence from Dividend Change Announcements." Journal of the American Taxation Association 29, no. 2 (September 1, 2007): 1–23. http://dx.doi.org/10.2308/jata.2007.29.2.1.
Full textAbstract:
Under the U.S. tax system, dividends are historically taxed at a higher rate than capital gains and thus incur a tax-related penalty. I provide evidence that the dividend tax penalty partially offsets the positive signaling and agency cost effects of dividends for fully taxable individual investors. The level of institutional ownership and the frequency of institutional trading, which proxy for the likelihood that the marginal investor is not a fully taxable individual, mitigate the negative dividend tax effect. My results support the notion that taxes impact equity valuation. I contribute to the literature by isolating dividends' negative tax effect from their positive signaling and agency cost effects.
39
Dumrongwong, Konpanas. "Do institutional investors stabilize stock returns? Evidence from emerging IPO markets." Pacific Accounting Review 32, no. 4 (November 26, 2020): 585–600. http://dx.doi.org/10.1108/par-11-2019-0145.
Full textAbstract:
Purpose The purpose of this paper is to investigate how institutional ownership is related to the stock return volatility of initial public offerings (IPOs) in an emerging market and to examine the relationship between institutional ownership and underpricing. Design/methodology/approach This paper investigates these relationships using White’s (1980) regression and 2 × 3 portfolios sorted by firm size and institutional holdings. The regression method examines the relationships across firms with different characteristics such as size, stock price, growth potential, firm age and type of investors. The data were chosen for this sample to cover the new equity issuances listed on the Thailand Stock Exchange for the period 2001–2019. Findings The empirical results suggest that institutional ownership is negatively associated with initial stock return volatility. This highlights the importance of institutional investors in maintaining stability in emerging stock markets. Additionally, it was found that institutional holding and underpricing are negatively correlated. The results are robust after controlling for potential heteroskedasticity and differences in firm characteristics. Originality/value To the best knowledge of the author, this paper is the first to study the relationship between institutional investors and volatility in Thai IPOs, and hence provides a deeper understanding of how investors influence the price formation and volatility of stock prices in emerging markets. Furthermore, besides academics, the results presented in this paper could be useful for market regulators and policymakers in designing future market regulations to efficiently stabilize equity markets.
40
Eakins, Stanley G., Stanley R. Stanswell, and Paul E. Wertheim. "Earnings Forecasts And Institutional Demand For Common Stock." Journal of Applied Business Research (JABR) 14, no. 1 (September 1, 2011): 57. http://dx.doi.org/10.19030/jabr.v14i1.5728.
Full textAbstract:
<span>Given that institutional investors now control over 50% of the equity funds in the market, it is important to understand the factors that influence their investment choices. A factor widely believed to influence institutional investment is analysts forecasts of future earnings performance. This paper investigates the ownership vs. earnings relationship using a number of different model specifications. The findings indicate that contrary to the generally accepted wisdom, there is little empirical evidence indicating that institutional investors are influenced by analysts forecasts. Even within the sub-sample of those firms where the analysts are most in agreement, the relationship between the change in institutional ownership and analysts forecasts is insignificant. These results persisted across the six year time period investigated.</span>
41
Kang, Grace Il Joo, Yong Keun Yoo, and Seung Min Cha. "How Do Institutional Investors Interact With Sell-Side Analysts?" Journal of Applied Business Research (JABR) 34, no. 3 (May 7, 2018): 455–70. http://dx.doi.org/10.19030/jabr.v34i3.10169.
Full textAbstract:
This paper examines how institutional investors interact with sell-side analysts (hereafter, SSAs) in Korean stock market. In particular, we examine the role of institutional investors as a more sophisticated mechanism which incorporates sell-side analysts’ stock recommendation, target price, and earnings forecast more rapidly than individual investors do. Moreover, we examine whether institutional investors differentiate the quality of sell-side analysts’ information. By using a sample of 1,421 firm-year observations in Korean stock market during 2001–2011, we find that the change of institutional investor’s ownership has a significantly positive association with the level of equity value estimates based on SSAs’ earnings forecasts relative to stock prices and their stock recommendation which are considered as SSAs’ indicator of stock market’s mispricing. In addition, we find that only when SSAs provide more accurate earnings forecasts, institutional investors incorporate SSA’s information into their stock trading. Thus, we conclude that institutional investors in Korean stock market contribute to the enhancement of stock market efficiency by incorporating SSAs’ information into their stock trading more rapidly than individual investors. Our findings add to the literature by shedding a light on the unobserved interaction among more sophisticated stock market participants, such as institutional investors and sell-side analysts.
42
SUDIMAN, JOSEPHINE, DAVID ALLEN, and ROBERT POWELL. "A CLOSER LOOK AT THE CHARACTERISTICS OF STOCK HOLDINGS OF FOREIGN AND LOCAL INVESTORS IN THE INDONESIAN STOCK EXCHANGE (IDX)." Annals of Financial Economics 08, no. 01 (June 2013): 1350002. http://dx.doi.org/10.1142/s2010495213500024.
Full textAbstract:
This study provides an overview of the characteristics of stockholdings of foreign and local investors in terms of firm sizes, price levels and liquidity. There are four key findings. First, the IDX is a highly concentrated market and foreign investors dominate the ownership of high market capitalization stocks. Second, foreign investors trade less frequently than domestic counterparts. Third, small, illiquid lower priced stocks dominate this market with domestic individual investors holding most of the stocks with these characteristics. Finally, the paper profits of foreign institutional and domestic individual investors are found to be higher than those of domestic institutional investors.
43
Ayers, Benjamin C., C. Bryan Cloyd, and John R. Robinson. "The Effect of Shareholder-Level Dividend Taxes on Stock Prices: Evidence from the Revenue Reconciliation Act of 1993." Accounting Review 77, no. 4 (October 1, 2002): 933–47. http://dx.doi.org/10.2308/accr.2002.77.4.933.
Full textAbstract:
We investigate the effect of an increase in the individual (shareholder-level) income tax rate on share values. We regress cumulative daily abnormal stock returns surrounding the passage of the Revenue Reconciliation Act of 1993 on firm dividend yield, tax status of the investor as represented by level of institutional ownership, the interaction of these two variables, and control variables. Consistent with our expectations, we find that (1) the higher the firm's dividend yield, the more negative the firm's stock price reaction to the increase in the individual income tax rate (i.e., the dividend tax rate) enacted in the Revenue Reconciliation Act of 1993, and (2) institutional holdings mitigate this negative reaction. Our results suggest that both the dividend policy of the firm and the tax status of the marginal investor influence the extent to which dividend taxes are reflected in share values. Our evidence is consistent with the traditional view that firm dividend policy influences the extent to which tax rate changes affect share values.
44
Djebali, Raoudha, and Amel Belanes. "On The Impact Of Family Versus Institutional Blockholders On Dividend Policy." Journal of Applied Business Research (JABR) 31, no. 4 (July 10, 2015): 1329. http://dx.doi.org/10.19030/jabr.v31i4.9320.
Full textAbstract:
This paper investigates the effect of not only the controlling shareholders but also their identity on dividend policy. For a large panel of French firms during the period 2006-2010, we find that the dividend payout ratio increases with the ownership concentration. However, this result changes with the identity of the largest shareholder. Family-controlled firms are more tempted to distribute lower dividends while firms dominated by institutional investors likely distribute higher dividends. Empirical results also reveal that firms with more independent directors are associated with higher dividend payout in contrast to US cross-listed firms.
45
Kim, Sun Min, Kyung Suh Park, and Chan Shik Jung. "The Effects of Stewardship Code on the Exercise of Voting Rights by Institutional Investors at Shareholders’ Meetings." Korean Journal of Financial Studies 49, no. 4 (August 31, 2020): 515–43. http://dx.doi.org/10.26845/kjfs.2020.08.49.4.515.
Full textAbstract:
Based on the sample firms listed on the Korea Stock Exchange, this study analyzes the characteristics of institutional investors who adopted the Korea stewardship code. The changes in their voting patterns at annual shareholders’ meetings and the characteristics of firms that led to such changes after the stewardship code was introduced in December 2016 are also analyzed. Empirical analyses reveal that the institutional investors who belong to a financial group, invest a larger amount of money in stocks, pay more dividends in cash, belong to foreign institutional investors, and showed a higher level of negative votes before code participation tend to participate more actively in the stewardship code. We also find that the institutional investors who have introduced the code tend to show a higher level of negative voting, especially when invested firms have more severe agency problems such that the invested companies pay less dividends in cash but hold relatively more cash, and have low shares of foreign investors as effective monitors of the firms. These results suggest that the introduction of the stewardship code tends to lead domestic institutional investors to more actively monitor the invested companies, which would eventually help improve the corporate governance of listed firms in Korea.
46
Lin, Shu-Ling, and Jun Lu. "Institutional Investors and Corporate Performance: Insights from China." Sustainability 11, no. 21 (October 29, 2019): 6010. http://dx.doi.org/10.3390/su11216010.
Full textAbstract:
This study uses the annual data of Chinese A-share listed companies held by institutional investors during the period of 2005–2016 for empirical analysis. First, this study uses the panel regression model to explore the relationship between institutional ownership and stock return volatility. Then, the CAPM one-factor model and the Fama–French three-factor model are used to analyze the relationship between institutional ownership and idiosyncratic risks. Finally, we estimate the relationship between institutional ownership and corporate governance. Furthermore, we compare the empirical results before, during, and after the crisis. This study uses the Hausman test and the endogenous test to validate the results. The empirical results show that the management behavior of independent institutional investors is more obvious post-crisis. However, gray institutional investors have no impact on idiosyncratic risks. In the regression of the CAPM one-factor model, domestic institutional investors have effectively reduced the idiosyncratic risks before the financial crisis. Foreign institutions’ monitoring performance before, during, and after the crisis is not obvious. All institutional ownership has a significant positive impact on the top 10 shareholders, but independent and domestic institutional ownership has a significant negative impact on senior shareholders. Institutional ownership has little impact on the movement of the first shareholder and CEO.
47
Meliana, Anggraeni, and Nurul Hasanah Uswati Dewi. "The effect of stock return and ownership structure on investment risk in manufacturing companies listed on the Indonesian Stock Exchange (IDX) 2011 - 2013." Indonesian Accounting Review 5, no. 2 (December 1, 2015): 187. http://dx.doi.org/10.14414/tiar.v5i2.649.
Full textAbstract:
This research aims to examine the effect of stock returns and ownership structure on the investment risk. The variables of this study are dependent variable, consisting of investment risk, and independent variable, consisting of stock return and ownership structure. The ownership structure in this study is measured using managerial own-ership and institutional ownership. The study sample consists of 101 manufacturing companies listed on the Indonesian Stock Exchange (IDX) 2011-2013. The result indicates that stock return has a positive effect on investment risk. If the investors expect the higher return rate, they must have the courage to bear the higher risk. The ownership structure does not have a negative effect on investment risk. It is because the ownership structure of a company is not included among the factors that affect the size of the investment risk that is likely to be experienced by investors. The implication of this study is that investors pay less attention to the ownership of the company to be invested. Therefore, the investors are expected to be more aware of the importance of ownership and corporate governance. Thus, it can reduce the failure experienced by investors in investing.
48
Moser, William J. "The Effect of Shareholder Taxes on Corporate Payout Choice." Journal of Financial and Quantitative Analysis 42, no. 4 (December 2007): 991–1019. http://dx.doi.org/10.1017/s0022109000003471.
Full textAbstract:
abstractThis study investigates whether the difference in individual shareholder tax rates between dividend income and capital gain (the dividend tax penalty) affects a firm's choice between distributing funds to shareholders through dividends or share repurchases. The results of this study suggest that, in periods in which the dividend tax penalty increases, firms are more likely to distribute funds to shareholders through share repurchases as opposed to dividends. The results also indicate that the relation between the dividend tax penalty and corporate payout choice is affected by the types of shareholders who own stock in the firm. As tax-disfavored institutional ownership increases and the dividend tax penalty increases, firms are more likely to repurchase shares as opposed to distributing dividends. In contrast, as tax-favored institutional ownership increases and the dividend tax penalty increases, firms are less likely to repurchase shares as opposed to distributing dividends. As senior managerial share ownership increases and the dividend tax penalty increases, firms are more likely to make distributions to shareholders in the form of share repurchases.
49
Hamdouni, Amina. "Dividend policy and corporate governance in Saudi stock market: Outcome model or substitute model?" Corporate Ownership and Control 12, no. 2 (2015): 74–91. http://dx.doi.org/10.22495/cocv12i2p7.
Full textAbstract:
Theories suggest that corporate governance mechanisms affect corporate dividend policies. This study extends and tests the implications of two extant static agency models making opposite predictions. The outcome model predicts an increase in dividends when the corporate governance mechanisms improve, because shareholders are better able to force managers to disgorge cash. In contrast, the substitute model suggests that an improvement in the corporate governance mechanisms reduces the role of dividends in controlling agency costs, leading to a decrease in dividends. This paper investigates the dividend policy for firms listed on Saudi Arabia Stock Exchange. This is a case study of Saudi Stock Market, where the determinants of dividend policy have received little attention. This study use a panel dataset of non-financial firms listed on Saudi Arabia Stock Exchange between the years of 2007 and 2010. Based on a panel of 366 firm year observations of 99 Saudi firms, we provide evidence in outcome model or substitute model with ownership structure, board structure and debt policy. Three Tobit models are specified: In the first, we construct a governance index based on eight criteria: seven criteria which capture various aspects of a firm’s structure, policies and practices that constitute good governance and a criterion that examines the company’s compliance with Shariah law in all its activities. Therefore, we estimate the effect of corporate governance on dividend policy in the first model. In the second, we investigate how dividends interact with corporate governance mechanisms in a panel of data. We explore the relation between dividends and ownership structure (ownership concentration and managerial ownership), board structure (board size, Board independence and Chairman-CEO duality) and debt policy. In the final, another test of the substitute and the outcome models is built on the Jensen (1986) free cash flow theory, which states that dividend policy can extract surplus cash from management control by reducing free cash flow. In this third model, we examine how corporate governance improvements affect the dividends’ sensitivity to free cash flows by focusing on the coefficients on the interactive variables of the ownership structure, board structure, debt policy and the free cash flow. For the three models, we divide sample in two subsamples and we compare the results obtained by using criteria of company’s compliance with Shariah law. For the effects of corporate governance (measured by corporate governance score) on dividend levels, we find that dividend policy is a substitute model for good governance for all Saudi Arabia firms. When we select only Shariah compliant firms, results indicate also that dividend policy is a substitute model for good governance but results are insignificant. When we select only Non-Shariah compliant firms, results indicate the same conclusion. We find that governance is associated with fewer dividends, supporting the substitute model and indicating the influence of good governance by forcing less cash to be returned to investors. For the effects of corporate governance mechanisms on dividend levels, we find that the only variable affect the dividend levels for Non-Shariah compliant firms is the separation in the functions of chairman and of CEO supporting the substitute model. For Shariah compliant firms, dividend policy is an outcome for the separation in the functions of chairman and of CEO, and ownership concentration. Governance through the separation in the functions of chairman and of CEO and ownership concentration influences firms by forcing more cash to be returned to investors. For the effects of the corporate governance improvements on dividends’ sensitivity to free cash flow, our results support the substitute hypothesis for Shariah compliant firms regardless the board independence, board meeting, managerial ownership and debt. Improvements in these corporate governance mechanisms reduce firms’ need to force out the free cash flow through dividends. For Non-Shariah compliant firms, our results support the outcome model for managerial ownership and ownership concentration
50
Bratten, Brian, and Yanfeng Xue. "Institutional Ownership and CEO Equity Incentives." Journal of Management Accounting Research 29, no. 3 (September 1, 2016): 55–77. http://dx.doi.org/10.2308/jmar-51599.
Full textAbstract:
ABSTRACT This study provides new evidence on the relation between institutional ownership and the equity incentives provided to CEOs by their portfolio holdings of stock and stock options. We show that when firms' CEOs have abnormally high equity incentives, higher institutional ownership is associated with a larger reduction in the incentives. Conversely, when firms' CEOs have abnormally low equity incentives, higher institutional ownership is associated with a larger increase in these incentives. To achieve this, we find that firms with higher institutional ownership that have abnormally high (low) incentives experience a greater reduction (increase) in CEO annual option grants and a substitution between CEO equity-based compensation and cash-based compensation. Our findings highlight the important role of institutional investors in enhancing efficiency in the top executives' compensation contracting process. JEL Classifications: G30; G34; J33; L25; M41.