Ownership structure and its effect on dividend policy in the Mexican context

Abstract

This work focused on analyzing whether the ownership structure has any effect on the dividend policy of companies in the Mexican market. The decision of dividend payment is one of the major elements in corporate policy, as this dividend policy influences the value of the company. Therefore, decisions such as adopting a company growth policy through the reinvestment of profits, or better yet allocating them to the payment of dividends, are going to be influenced by the type of ownership structure that dominates the company. The analysis was based on three types of ownership structures such as: families, institutions (mainly banks) and small blocks of shareholders. Our results show that the concentration of property in families negatively influences the payment of dividends, whereas the presence of institutional shareholders has an inverse effect on the payment of the same. This indicates that the presence of big shareholders foreign to the families has a different effect on the payment policy of dividends in the Mexican context. This work provides literature information about the context of emerging countries as is the case of Mexico, given that much of the existing investigations focus on European or North American contexts, where the markets are well regulated and property is broadly distributed.

The impact of ownership structure on dividend policy of listed firms in Jordan

“…They hold large shareholdings and have adequate knowledge and expertise, which in turn mitigate the agency cost and the need for high dividend payouts (Berezinets et al, 2017;Han et al, 1999;Shleifer & Vishny, 1986). On the other hand, Reyna (2017) found a positive relationship between institutional ownership and payment of dividends, he argued that when institutional investors intervene less in their guiding role, they would rather recover their investment by the payment of dividends, thus leads to alleviating the potential opportunistic behavior of the management. Benjamin et al (2016) and Farinha (2003) also argued that institutions may push the firms to pay higher dividends if they are convinced that the oversight of their managers is ineffective or extremely costly.…”

“…This variable is included as a dummy equal to one if the firm is a family and zero otherwise. Moreover, institutional ownership (INS) is calculated in a similar manner to Ullah et al (2012), Mehdi et al (2017), Ibrahim and Shuaibu (2016), and Reyna (2017), which is the percentage of a firm's shares held by banks, insurance firms, pension funds, mutual funds, and other financial institutions. According to J. G. Wei et al (2004), Chai (2010), and Ibrahim and Shuaibu (2016), foreign ownership (FOR) is measured as a percentage of a firm's share that is held by foreign corporations.…”

Foreign directors, indigenous directors and dividend payout structure in Nigerian deposit money banks

“…Theoretically, there have been conflicting results in the body of literature. The upper echelons theory explains that the strategic decisions of every firm are primarily influenced by background characteristics of the firm's individual top executives (Reyna, 2017). These characteristics include personalities, experiences, values, beliefs and other human factors.…”

The Role of Ownership’s Concentration Moderating Dividend Policy Effects on Firm Value

“…Crisostomo and Brandao (2016) in Brazil proved that the concentration of ownership had adverse effects on the distributed dividends. Furthermore, the research of Boubraki et al (2011) and Reyna (2015) in Canada proved that the concentration of ownership had adverse effects on the firm value. Thus, the concentration of ownership had predicted to weaken the dividends policy influences on the firm value.…”