Dividend Distribution Research Articles

Cash Dividend, Principal-agent Problem and Local Chairperson: Evidence from China

ABSTRACT This paper studies the relationship between the local chairperson of the board and the cash dividend distribution level by using annual data from A-share listed firms in China. Firstly, the empirical results show a firm’s cash dividend distribution level will increase when the firm has a local chairperson. The analysis of mediating effect concludes that the local chairperson can improve corporate performance by alleviating the first type of principal-agent problems, and this ultimately increases its cash dividend distribution level. Secondly, the cross-sectional tests show this consistency has a greater effect on the cash dividend distribution levels of state-owned enterprises and those that embraced high-quality external audits. Finally, this relationship will be weakened in firms that have the more serious second type of principal-agent problems.

Does the audit quality have any moderating impact on the relationship between ownership structure and dividends? Evidence from Jordan

The article aims at investigating whether audit quality impacts the relationship between ownership structure and dividends in companies listed on the Amman Stock Exchange (ASE). The article is constructed on the analysis of time-series–cross-section (TSCS) (Panel Data). The study sample comprises 34 companies listed on the Amman Stock Exchange between 2016 and 2021. The study sample’s content of the financial reports is analyzed to attain appropriate data for the study. The Findings indicate that family ownership and ownership of board members negatively impact dividends. In contrast, institutional ownership and concentrated ownership positively impact dividends, as no effect of foreign ownership is found on dividends. By introducing audit quality as a modified variable on the relationship between ownership structure and dividends, the findings demonstrate that audit quality positively enhances and strengthens this relationship. This article with its results is of great significance to future stockholders and shareholders, as they help in selecting companies capable of distributing higher dividends than other companies and achieving satisfactory investment returns. The findings of the study also focus on the significance of audit quality as a guarantor for regulating the relationship between forms of ownership structure and the distribution of dividends. This study is regarded among the little research investigating the factors that would impact the relationship between ownership structure and dividends. This article plays a key role in bridging the research gap related to the lack of studies dealing with the relationship between ownership structure and dividends in emerging markets.

Coalizão de acionistas e dividendos: evidências do mercado de capitais brasileiro

ABSTRACT This article examines the effect of the heterogeneity of shareholder coalitions on the distribution of dividends in companies listed in Brazil. To analyze the relationship between large shareholders and dividends, it is essential to consider the way the control is ensured. Large shareholders can share control by forming coalitions, and differences in the composition of coalitions can alter the incentives the cooperating parties have for the activity of monitoring. Based on shareholder agreements, we explore the heterogeneity among shareholder coalitions by presenting elements that can characterize the role of shared control in the corporate governance of companies in a market environment described by the concentration of control in a single large shareholder. This study presents potential economic and social impacts, as it is of particular interest to outsider shareholders, and even potential investors, to know how insiders can use dividend policy, since the distribution of profits tends to mitigate agency problems. To identify the shareholder coalitions we resorted to shareholder agreements. The analysis model was estimated using the two-stage system generalized method of moments (GMM-Sys) with unbalanced panel data for the period from 2008 to 2019. We discovered that the number of shareholders in the coalition and the leveraging of the voting rights of the biggest shareholder in the coalition are negatively related to the dividends distributed, and that the voting rights of the coalition are positively related to the dividends distributed. These results contribute to the principal-principal approach of agency theory and highlight that the incentives and capacity of shareholder coalitions to pursue private benefits of control depend on their own characteristics.

Board gender diversity and corporate financial performance in the Vietnamese stock market

Enterprises are considered as an important entity in the economies of all countries. The Board of Directors is the heart of the enterprise and plays a decisive role in all activities of the enterprise and also implements policies on investment, capital mobilization and dividend distribution in the enterprise. The choice of board of directors in a joint-stock enterprise significantly affects the business activities of the enterprise and thereby affects the contribution of the enterprise to the economy. In the current development process, in addition to enhancing board independence and expanding the board of directors, the board of directors aims at gender diversity in order to maximize the contribution of all kinds of people to the development of enterprise. Using 98 firms listed on the Hanoi Stock Exchange and Ho Chi Minh City Stock Exchange in the period of 2014 – 2019, and using quantitative analysis on unbalanced panel data, the research results indicate that the participation of women helps the board of directors for gender diversity as well as the independence of the board has not yet had an impact on the financial performance of the business. However, the larger board size is consistent with a greater financial performance, and the smaller board size can lead the lower the financial performance. The research also confirms that choosing the optimal capital structure has the potential to improve corporate profitability and help businesses take advantage of tax shields and business supervision. In this research, we have not found the benefits of large enterprises on the financial performance on the stock exchange. It can confirm that the size of the business has not had an impact on the profit of the business.

Drivers of Weighted Average Cost of Capital in Selected Listed Companies in Tanzania

This study investigates drivers of the weighted average cost of capital (WACC) for the listed companies in Tanzania. Specifically, the study aimed to investigate the relationship between size of the firm and WACC of the selected listed companies in Tanzania, to examine how Profitability of the firm affects WACC of the selected listed companies in Tanzania, to analyze Growth rate impact on WACC of the selected listed companies in Tanzania and to examine how tangibility of the firm affects WACC of the selected listed companies in Tanzania. The study employed quantitative time series data covering data from various sources such as the published company’s financial statements, managerial commentary and reports, data from Dar-es-salaam Stock Exchange (DSE) was also form a prominent part of data for the purpose of the study in a span of 11 years (2010 to 2020). The study findings reveal that a percentage increase in the size of members will lead to a 0.00% increase in WACC. More so, A percentage increase in profitability will lead to a 1.46 percent decline in WACC. A percentage increase in growth rate will lead to a 0.07 percent increase in WACC. A percentage increase in asset tangibility will result in a 0.04 percent decline in WACC. The study recommends that a company’s capitalization structure can have a significant impact on its financial performance as everything begins with how the company finances its operations, from its first sale to future investments. However, the profitability of a listed company can be achieved by finding against the company’s predetermined investments as the company uses profitability for expansion and dividend distribution to shareholder debt by carefully analyzing the debt ratio. Additionally, larger profits made by a firm can boost investor and creditor confidence in capital investments, which has an impact on a company’s capital structure.

India: The Dividend Distribution Tax: Entitlement to Treaty Protection?

India: The Dividend Distribution Tax: Entitlement to Treaty Protection?

A synthesized distribution model: Asymmetric information, agency problem, and intertemporal optimization

A firm’s policy of distribution over current and future time periods influences the capital structure of the firm and its profitability. Managers decide on the amount of effort input in such a context of financial structure to maximize their utility. Nevertheless, shareholders’ preferred distribution of income is determined by the goal of corporate value maximization. The study aims to reach an optimal level of income distribution and reinvestment over current and future periods in which both the manager’s utility and shareholders’ corporate value have been maximized. The study adopts Lagrange’s multipliers method and the discounted cash flow valuation model of corporate value maximization. By processing a method of mathematical deduction and optimization, the study aims to reach an optimal equilibrium level of the dividend distribution model and explore key factors in the model for the determination of the distribution of income. As a result, the study concluded an optimal dividend distribution model, in which six factors jointly determine a theoretical equilibrium of optimization. These factors consist of the capital structure of the firm, the tax shield from debt financing, the growth rate of the dividend, dividend tax, the investment strategy of the principal, and the cost of capital.

Analisis Pengaruh Kebijakan Keuangan Terhadap Profitabilitas dengan Kebijakan Penurunan Tarif PPh Badan Sebagai Variabel Moderasi

This study aims to examine the effect of financial management policies on profitability. Apart from that, the effect of each independent variable on the dependent was tested with a decrease in corporate income tax rates as a moderating variable. The population in this study are manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2020. There are 96 samples that meet the following criteria; manufacturing companies whose 2019 and 2020 financial statements are available on the IDX, manufacturing companies that do not suffer losses and manufacturing companies that do not have interest write-off income on debt restructuring. This research was analyzed using Multiple Regression Analysis. The results of this study state that the dividend distribution policy has a positive effect on profitability, an increase in debt has a negative effect on profitability, an increase in investment has a positive effect on profitability, a decrease in corporate income tax rates is not able to moderate the effect of dividend distribution policies on profitability, a decrease in corporate income tax rates can strengthen the effect of funding policy on profitability, lower corporate income tax rates weakened the effect of funding policy on profitability.

Impact on Dividend Payout Analysis between Nepal Bank Limited, Rastriya Banijya Bank Limited and Agricultural Development Bank Limited

This study entitles, “Factors Analysis on Dividend Payout of Nepal Bank Limited, Rastriya Banijya Bank Limited and Agricultural Development Bank Limited” focused on quantities paid are decided on the company's performance analysis of Nepal Bank Limited (NBL), Rastriya Banijya Bank Limited (RBB) and Agricultural Development Bank Limited (ADB) taking three sample banks. This study focused to find the effects of different factors and on its dividend payout taking secondary data from 2012/13 to 2021/22. The study’s finding indicate that larger corporations may afford to pay bigger dividends because of their greater financial strength. Also the profitability ratio, company size, and leverage ratio all have a negative correlation with the dividend payout ratio and as the bank's size grows, the dividend distribution will be reduced and increases in net income have a positive impact on dividend payments, meaning that higher payments will be made when growth is strong.

IMPACT OF OWNERSHIP STRUCTURE AND DIVIDEND ON FIRM PERFORMANCE: EVIDENCE FROM KSE-100 INDEX

This study aims to objectively investigate the effects of dividend and ownership structure on company’s profitability. In order to determine how foreign ownership, family ownership, institutional ownership, and dividend payout affect company’s performance in Pakistan, this study employs approach of panel-regression. The information was gathered via a secondary technique, from the Pakistan Stock Exchange and yearly reports of businesses, and was being used for 74 companies for Six years. According to the study's findings, foreign ownership, family ownership, institutional ownership, and dividend payout, all have a statistically significant effect on a company's success. The results show that information asymmetries are essential for understanding of how dividend distribution patterns and business performances are related. This study is unique as it considers both the ownership structure and the dividend in order to determine how they affect a company's profitability. By assessing the ownership structure and looking at its effects on firm performance and moreover by looking at dividend payout effect on performance, this research will help businesses and investors in making decisions that will increase profitability and returns respectively. Keywords: Foreign ownership, Institutional ownership, Family ownership, Dividend payout, Firm performance

Cash Holdings, Dividend Payout, and Corporate Value: The Role of Institutional Investors

This study examines the relationship between cash holdings and dividend payout on corporate value. The moderating effect of institutional investors on the effect of cash holdings and dividend distribution on corporate value is also investigated in this study. This study applied non-financial companies listed on the Indonesia Stock Exchange between 2015 and 2019 and a total of 1269 observations. The data in this study were analyzed using the ordinary least squares method. According to the findings of the study, cash holdings have a positive influence on the value of the company. However, corporate value is unaffected by dividend payout. The findings of this investigation suggest that institutional investors do not moderate the impact of cash holdings on corporate value. However, institutional investors moderate the impact of dividend payout positively. This paper elaborates on institutional investors, a mechanism for agency conflict in relation to cash holdings, dividend payout, and corporate value.

RESPON HARGA SAHAM DI SEKITAR PENGUMUMAN DIVIDEN DI BURSA EFEK INDONESIA

This study aims to prove the response of stock prices around the dividend announcement 10 days before and after the ex-dividend date that occurs in 2021. Using a sample of 158 issuers listed on the Indonesia Stock Exchange that declare cash dividends, the results of trend graph analysis and difference tests the average change in stock prices (paired sample t-test) shows that the first; the announcement of cash dividends has caused a tendency for stock price changes to increase before the ex-dividend date and decrease after the ex-dividend date, secondly; there is a significant difference in stock price changes before and after the ex-dividend date. This indicates that there was a significant movement of stock prices during the two observation periods due to the announcement of the dividend distribution.

Dividend Payout Decision and Investors’ Behavior

The paper aims to examine the effect of dividend payout on perceived value of shareholders. The purpose behind of this study is to understand awareness of investors about dividend payout and investment behavior. This study is based on descriptive research design. It is based on the perception of investors and includes the questionnaire asked to 150 investors at Kathmandu Valley. It is found that investor's preference for investment lies in dividend payout of the organization as investors are positively influenced through dividend distribution. Companies must maintain stable dividend payout ratio as shareholders expect it and reveal a preference for it. As an investor, one must be aware of dividend stock for the stable profit for longer period of time. Such stocks can act as hedges against higher-risk if there is any other risky stock in the portfolio.

A New Legal Form for Social Enterprises in Asia

Abstract This Article argues that there should be a new legal form for social enterprises in Asia that takes into account the distinctive contexts within which different types of social enterprises operate in the different Asian jurisdictions. In order to understand and evaluate social enterprise law, this Article advances an analytic framework consisting of (i) corporate purpose; (ii) directors’ duties; (iii) decision-making powers; (iv) reporting and certification; and (v) distribution of dividends, assets, and tax benefits. Using the four leading common law jurisdictions (Singapore, Hong Kong, Malaysia, and India) as a case study, the Article challenges the dominant assumption that the existing legal forms in Asia are adequate and appropriate to achieving the aims of social enterprises in Asia. It also critiques the legal forms for social enterprises in the United Kingdom and the United States, and finds them unsuitable for adoption by the Asian jurisdictions.

The Effect of Dividend Payouts and Non-Payouts on the Share Price and Market Capitalization: An Empirical Study of Selected Indian Companies

Distribution of dividends is a challenging and critical decision for corporate companies. An effective dividend policy is essential for striking a balance between meeting shareholders’ expectations and the future financial needs of corporate companies. The periodic dividend payout will boost investors' and shareholders' confidence and help the company to build a strong reputation, but it will deteriorate the financial reserves of the company. The non-payment of dividends, however, will result in cost-effective surplus reserves for companies’ future operations. In this complex situation, two questions need to be answered with dividend non-paying companies’ price action, and the same need to be justified empirically: Do dividend payouts uplift the demand for shares of the company, causing prices to take an uptrend in the stock market as a post-effect? Do the dividend payouts help in building the overall market valuation of the company? For this study, six public companies listed on the National Stock Exchange of India were selected using the judgmental sampling method: Tech Mahindra, TCS, and Maruti Suzuki as dividend-paying companies; Mahindra CIE, Godrej Properties, and Indiabulls Real Estate as non-paying dividend companies. Their price action in response to the dividend payout and non-payout are considered and carefully analyzed using the Microsoft Excel application. The price changes in response to dividend payouts were evaluated for four consecutive years; their effect on market capitalization was also assessed, and findings were presented separately for regular dividend-paying and non-paying companies. The study concluded that Tech Mahindra, TCS, and Maruti Suzuki showed phenomenal price growth, and market capitalization was seen soon after the dividend declaration. In contrast, Mahindra CIE, Godrej Properties, and Indiabulls Real Estate prices declined in response to dividend non-payouts. Hence, it is concluded that dividend payouts have several positive effects, such as improving investor goodwill and increasing investment inflows, which in turn leads to an increase in share price and market capitalization.

Does environmental regulation dividends inequality impact inclusive growth? Evidence from China.

Based on the panel data of 281 city level in China for the period of 2004-2016, this study uses the Cobb-Douglas production function to investigate the distribution of environmental regulation dividends and further adopts the threshold model to explore the impact of environmental regulation dividends inequality (ERDI) on inclusive growth (IG). Results indicate that the distribution structure of the environmental regulation dividends has improved, but the inequality between urban-rural residents is still apparent. Environmental regulation dividends inequality has a non-linear threshold effect on inclusive growth, which turns from a significant inhibition to a slight promotion after exceeding the threshold value. Grouping tests show that environmental regulation dividends inequality has a heterogeneous effect on cities with different resource endowments and leading industries and still inhibits inclusive growth of non-resource-based cities even if the inequality is higher than the threshold value. Mechanism analysis reveals that primary distribution and redistribution are the main channels through which environmental regulation dividends inequality inhibits and promotes inclusive growth when the inequality is below and above the threshold value, respectively. These conclusions have important implications for enhancing and distributing environmental regulation dividends to promote inclusive growth.

Does Ownership Structure Influence Dividend Distribution Policy in India? Evidence Using Panel Data Analysis

This article evaluates the influence of ownership structure (OS) components on dividend distribution policy in India. More precisely, it aims to comprehend the impacts of promoters’ shareholdings (PRMS), institutional investors’ shareholdings (INS) and retail investors’ shareholdings (RIS) on dividends of Indian listed companies. This article uses equity dividend divided by book value (DNW) to determine the dividend distribution policy for the selected panel of 80 listed companies for the period of 5 years (2016–2020). The static as well as dynamic panel data regression models are applied in the study. The static panel data regression results exhibit that none of the three OS explanatory variables (PRMS, INS and RIS) affect significantly the dividend distribution policy of Indian listed companies. Similar results are depicted by the dynamic panel data regression model also, thus ensuring robustness of the results. Hence, this article does not find support for agency theory, signalling theory and clientele effect. The study recommends that investors need not consider the composition of shareholding pattern of a company to have any significant influence on dividends while making their investment-decisions. The findings also add to the increasing studies across the globe evaluating the influence of OS on dividends.

Transnational Grouping of Companies and Unresolved Questions Regarding the EU Parent-Subsidiary Directive: Implications for Companies, Member States and Non-EU Member States

This article analyses whether the levying of a tax at the level of an EU parent company, due to a further distribution of tax-exempt dividends received from EU subsidiaries to domestic shareholders, infringes EU law, in particular whether article 4(1) of the EU Parent-Subsidiary Directive is being violated.

A Revised Paradigm for Calculating the NPA Percentage in Banks

The gross and net NPA ratios are powerful indicators of the health of banks. Globally and more specifically in India, the increasing rate of non-performing assets has been a very critical issue for decades. Primarily, NPA ratios of banks indicate the quality of their rate-sensitive assets and are used by rating agencies, regulators, investors, and other stakeholders for decision-making ranging from distribution of dividends to classifying the banks under the prompt corrective action category. Since these ratios are pivotal, this study examined the existing system of calculation of these ratios and their lacunae. One of the objectives of this study was also to devise a new formula for the calculation of gross as well as net NPA percentages. A comparison of the net and gross NPA percentage in respect of a few banks as per the existing and proposed formula was done, and it was found that the difference was statistically significant. The study has important implications for the banking industry and may help the regulators and investors assess banks’ health more stringently than is presently being done.

A Descriptive Study of Dividend Policies with Reference to Indian Firms

Present study examined the factors which are considered vital for a firm while deciding about the distribution of dividend of the companies. The study is beneficial for the potential investors in the equity market as they can compare the performance of firms paying with that of companies not paying dividend. With this study investors also understand about the pattern of dividend payment of the Indian listed companies belonging to various sectors. The research can provide a better understanding of the factors that contribute in determining the dividend payout and would give an insight into what kind of ownership structure is beneficial for the wealth of shareholders.