The Impact of Ownership Structure on Dividend Policy Evidence from Emerging Markets KSE-100 Index Pakistan
Hamid Ullah, Asma Fida, Shafiullah Khan

Abstract
This study focus on one of important corporate decision that can have a great impact on the sentiments of the investor’s i.e. corporate dividend policy. This study investigates the determinants of the corporate dividend policy in the context of agency relation. The analysis of the study has based on the random sample of seventy firms from Karachi Stock Exchange KSE-100 index for the period of eight years ranging from 2003 to 2010. Stepwise multiple regression has used to investigate for the relationship of ownership variables with the dividend payouts. The empirical results suggested that there has a negative relationship between the dividend payouts and managerial share ownership and thus these are alternative tools that can be used to minimize the agency problem. Where there has positive relationship between the institutional and foreign share ownership suggested that the higher has their shareholdings the higher will be the firm dividend payouts that will leads to less availability of the cash flows with the opportunities managers to expropriate the shareholders wealth. Further more managerial share ownership has explanatory power of 18%. While the institutional ownership has explanatory power of 23.3% there for it can be concluded that the incremental effect of the institutional ownership in the model has about to 5% while that of the foreign ownership contribute about 1.9% with the total model explanatory power of 25.2%.

Full Text: PDF