Ownership structure, board characteristics and dividend policy: evidence from the Warsaw Stock Exchange

Aleksandra Pieloch-Babiarz

DOI: http://dx.doi.org/10.12775/EiP.2019.022

Abstract


Motivation: The ownership structure is a frequently undertaken research issue on the dividend determinants. However, there are not many scientific studies conducted on the Warsaw Stock Exchange (WSE) which investigate the ownership structure of dividend payers in the context of board characteristics (i.e. board composition, board independence or chairman entrenchment). Therefore, a research gap has been observed in this area and an appropriate study has been conducted.

Aim: The aim of the paper is to investigate the links between the ownership structure of publicly traded companies and the dividend pay-outs in the context of board characteristics.

Results: Empirical research has been conducted on a group of 354 non-financial companies listed on the WSE. The results of the study indicate that in the companies that pay out dividend one can observe a greater share of both the institutional investors and the State Treasury. The board of such companies is bigger, the board members more often hold shares and the chairman occupies the position for a longer time. Moreover, the propensity to pay dividend and dividend amount increase if there is an increase in institutional ownership, board duality and chairman entrenchment.


Keywords


dividend pay-out; ownership structure; board composition; board independence; chairman entrenchment

Full Text:

PDF

References


Adams, R.B., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94(2). doi:10.1016/j.jfineco.2008.10.007.

Adamska, A. (2013). Własność i kontrola: perspektywa akcjonariuszy spółek publicznych. Warszawa: SGH.

Adjaoud, F., & Hermassi, N. (2017). The impact of corporate governance mechanisms on the dividend policy of Canadian firms: empirical study. Journal of Business, Accounting and Finance, 11(1).

Al-Najjar, B., & Kilincarslan, E. (2016). The effect of ownership structure on dividend policy: evidence from Turkey. Corporate Governance, 16(1). doi:10.1108/cg-09-2015-0129.

Aluchna, M., Berent, T., & Kamiński, T. (2019). Dividend payouts and shareholder structure: evidence from the Warsaw Stock Exchange. Eastern European Economics, 57(3). doi:10.1080/00128775.2019.1568196.

Baltowski, M. (2017). Więcej władzy niż własności: Skarb Państwa jako szczególny inwestor na GPW w Warszawie. Studia Ekonomiczne. Economic Studies, 1(92).

Barclay, M., Holderness C., & Sheehan, D. (2009). Dividends and corporate shareholders. Review of Financial Studies, 22(6). doi:10.1093/rfs/hhn060.

Bena, J., & Hanousek, J. (2008). Rent extraction by large shareholders: evidence using dividend policy in the Czech Republic. Czech Journal of Economics and Finance (Finance a uver), 58(3–4).

Ben-Nasr, H. (2015). Government ownership and dividend policy: evidence from newly privatised firms. Journal of Business Finance & Accounting, 42(5–6). doi:10.1111/jbfa.12115.

Bohdanowicz, L. (2016). Własność menedżerska w polskich spółkach publicznych. Łódź: Uniwersytet Łódzki.

Florackis, C., Kanas, A., & Kostakis, A. (2015). Dividend policy, managerial ownership and debt financing: a non-parametric perspective. European Journal of Operational Research, 241(3). doi:10.1016/j.ejor.2014.08.031.

Grullon, G., Michaelly, R., Benartzi, S., & Thaler, R.H. (2005). Dividend changes do not signal changes in future profitability. Journal of Business, 78(5). doi:10.1086/431438.

Gugler, K., & Yurtoglu, B.B. (2003). Corporate governance and dividend pay-out policy in Germany. European Economic Review, 47(4). doi:10.1016/S0014-2921(02)00291-X.

Harada, K., & Nguyen, P. (2011). Ownership concentration and dividend policy in Japan. Managerial Finance, 37(4). doi:10.1108/03074351111115313.

Jensen, M. (1986). Agency costs of free cash flow, corporate finance, and takeovers. American Economic Review, 76(2).

Kowalewski, O., Stetsyuk, I., & Talavera, O. (2008). Does corporate governance determine dividend payouts in Poland? Post-Communist Economies, 20(2). doi:10.1080/14631370802018973.

Kufel, T. (2009). Ekonometria: rozwiązywanie problemów z wykorzystaniem programu GRETL. Warszawa: PWN.

La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (2000). Investor protection and corporate governance. Journal of Financial Economics, 58(1–2). doi:10.1016/s0304-405x(00)00065-9.

Liljeblom, E., & Maury, B. (2016). Shareholder protection, ownership, and dividends: Russian evidence. Emerging Markets Finance and Trade, 52(10). doi:10.1080/1540496X.2015.1073991.

Mancinelli, L., & Ozkan, A. (2006). Ownership structure and dividend policy: evidence from Italian firms. The European Journal of Finance, 12(3). doi:10.1080/13518470500249365.

Maury, C., & Pajuste, A. (2005). Multiple large shareholders and firm value. Journal of Banking & Finance, 29(7). doi:10.1016/j.jbankfin.2004.07.002.

Mehdi, M, Sahut, J.M, & Teulon, F. (2017). Do corporate governance and ownership structure impact dividend policy in emerging market during financial crisis? Journal of Applied Accounting Research, 18(3). doi:10.1108/JAAR-07-2014-0079.

Moortgat, L., Annaert, J., & Deloof, M. (2017). Investor protection, taxation and dividend policy: long-run evidence, 1838–2012. Journal of Banking and Finance, 85. doi:10.1016/j.jbankfin.2017.08.013.

Nowak, S., Mosionek-Schweda, M., Mrzygłód, U., & Kwiatkowski, J. (2017). Greedy state? The effect of the government shareholder on the dividend payout ratio and smoothing. International Journal of Contemporary Management, 16(4). doi:10.4467/24498939IJCM.17.041.8264.

Schooley, D.K., & Barney, L.D. (1994). Using dividend policy and managerial ownership to reduce agency costs. Journal of Financial Research, 17(3). doi:10.1111/j.1475-6803.1994.tb00198.x.

Short, H., Zhang, H., & Keasey, K. (2002). The link between dividend policy and industrial ownership. Journal of Corporate Finance, 8(2). doi:10.1016/s0929-1199(01)00030-x.

Sierpińska-Sawicz, A. (2014). Dividend policy of state treasury shareholding companies. Journal of Economics and Management, 18.

Smith, D.D., Pennathur, A.K., & Marciniak, M.R. (2017). Why do CEOs agree to the discipline of dividends? International Review of Financial Analysis, 52. doi:10.1016/j.irfa.2017.04.010.

Stanisz, A. (2007). Przystępny kurs statystyki, tom 2. Kraków: StatSoft.

Wellalage, N.H., Fouzi, F., Wang, A., & Basyith, A. (2014). Corporate governance and cash dividend policy: evidence from Chinese IPOs. Malaysian Accounting Review, 13(1).








ISSN 1898-2255 (print)
ISSN 2392-1625 (online)

Partnerzy platformy czasopism