Revisiting the Theoretical Nexus between Ownership Structure and Dividend Policy
DOI:
https://doi.org/10.24191/abrij.v12i1.8723Keywords:
Dividend Policy, Institutional Ownership, Managerial Ownership, Ownership StructureAbstract
This research determines the impact of ownership structure on dividend policy by using literature review. A total of 55 relevant articles were analyzed for this study. Key theories related to dividend policy including behavioral Dividend Theory, Signaling Theory, dividend Irrelevance Theory, Bird-in-Hand Theory are also examined. The findings indicate that ownership structure significantly impacts a firm's dividend policy, suggesting that enhancing dividend yield and payout ratios can improve firm performance. The study provide a deep understanding of effects of various ownership structure variables including Ownership Concentration, Foreign Ownership, Family Ownership, State Ownership, Institutional Ownership, Managerial Ownership. Previous literature indicates a positive correlation between family and institutional ownership with a firm's dividend policy. Additionally, foreign ownership, state ownership, managerial ownership, and ownership concentration are also positively associated with dividend policy. The positive relationships among all six ownership structure variables and dividend policy underscore the substantial influence of ownership structure on a firm's dividend policy. Furthermore, this research identifies future research gaps for scholars and academics
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