How foreign and institutional directorship affects corporate dividend policy

Abstract

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Does Size of the Firm Matter in the Relationship Between Foreign Ownership and Dividend Policy?

“…Moreover, the economic significance of this term suggests that on the average, in larger firms, the presence of foreign owners will approximately result in a 35.50% increase in the likelihood of dividends paid. This result is in line with the hypothesis and aligns with previous studies (Cao et al, 2017;Hwang et al, 2013;Obaidat, 2018;Pucheta-Martínez & López-Zamora, 2017). This suggests that in larger firms, foreign owners may tend to push for cash dividend payment and, hence, be willing to alleviate the agency conflict using dividend at the expense of tax.…”

Engagement of directors representing institutional investors on environmental disclosure

“…Prior literature has emphasized that, due to the links that their representatives maintain with firms, institutional directors do not all behave in the same way (Almazan, Hartzell, & Starks, 2005;Borokhovich, Brunarski, Harman, & Parrino, 2006;Ferreira & Matos, 2008;Ramalingegowda & Yu, 2012). There are two types of institutional director: pressure sensitive and pressure resistant (Dong & Ozkan, 2008;Pucheta-Martíneza & López-Zamora, 2017). Pressuresensitive institutional directors represent institutional investors which maintain two relations with the firms in which they have invested: commercial and investment (banks and insurance firms).…”

“…Based on this argument, institutional directors are capable of monitoring managers (see, e.g., Pucheta‐Martíneza & López‐Zamora, ) and disciplining them (Lee & Roberts, ). Furthermore, they are also concerned about their reputations (Harjoto & Jo, ; Johnson & Greening, ; Webb, ) and have a long‐term perspective (Graves & Waddock, ), so they will defend stakeholders' interests, and consequently may encourage managers to disclose environmental information.…”

Decision to pay dividends and ownership structures in Nigeria

“…These regulatory authorities for example CBN, requires banks to adequately provide for minimum capital adequacy ratio, cash reserve either low or moderate and a non-performing loan ratio not exceeding 5% prior to paying dividends to the shareholders. Secondly, prior studies on decision to pay dividends excludes financial firms from the final sample of their investigations (see for example, Baker, Dutta, & Saadi, 2008;Chang et al, 2016;Francis et al, 2011;Idris et al, 2017;Pucheta-Martínez & López-Zamora, 2017) and factors affecting dividend policy varies from financial to non-financial firms (Baker et al, 2008). The data were collected from the annual report of individual firms.…”