The relationship between corporate ownership structure and dividend policy : An investment on VN100 of HOSE
Abstract
The primary purpose of this research is to investigate the relationship between
corporate ownership structure and dividend policy in terms of cash dividend with the
evidence from top 100 companies (VN100 index) listed on Ho Chi Minh Stock
Exchange.
The sample consists of top 100 companies listed on HOSE in 2014. Quantitative
method is applied as the core approach with correlational statistics. Specifically, the
relationship will be analyzed within two aspects: (1) how ownership structure affects the
decision to pay or not to pay dividends and (2) how ownership structure influences the
magnitude of dividend payouts. Accordingly, logistic model and Tobit model were used,
respectively, to test the hypotheses under these two perspectives.
The result shows that among control variables, profitability and firm’s size have
positive effects on the firm’s decision whether to pay dividends; however, only firm’s
size significantly affects the amount of dividend payments. The reseach’s result also
reveals that governmental ownership has a positive and significant impact on both the
firms’ likelihood to pay dividends and the amount of dividend payouts. In contrast,
managerial ownership is found to be negatively significantly correlated to the firms’
likelihood to pay dividends as well as the magnitude of dividends. Moreover, according
to the result, foreign ownership has a positively significant relationship to the firms’
likelihood to pay dividends; however, not the magnitude of dividend payments.
Ultimately, institutional ownership is uncorrelated to both the decision to pay dividends
and the amount of dividends.