The impact of ownership concentration on payout across Nordic firms

Abstract

We investigate whether ownership concentration influences payout policy and which effect foreign institutions and government as large shareholders have on payout across firms listed in the Nordic countries. We find that the impact of ownership concentration on payout largely differs among the countries. Higher ownership concentration leads to lower propensity to pay dividends in Finland and to repurchase shares in Norway and Sweden, while higher ownership concentration increases the propensity to dividend payment in Denmark and Norway. We show that ownership concentration has a negative impact on dividend amounts in Sweden and on repurchase amounts in Denmark, Finland and Sweden. We also find that the impact of ownership concentration on propensity to payout and on the payout amount is influenced by foreign institutions and governments as large shareholders. Our findings imply that the impact of ownership concentration on payout is significantly influenced by the context behind ownership concentration.