The Impact Of Ownership Structure On Dividend Policy Of Firms Listed On Ho Chi Minh City Stock Exchange Grom 2018 To 2022

Abstract

The COVID-19 pandemic has engendered profound alterations in the lives and business operations of enterprises. The disruption of global supply chains has rendered companies reactive in their production and commercial activities, thereby impacting firms’dividend policy. The objective of this research is to present evidence on the influence of ownership structure on the yearly dividend policies of manufacturing firms listed on the Ho Chi Minh City Stock Exchange (HOSE) between 2018 and 2022. I examine the ownership structure variables in terms of the proportion of state shareholders, and the proportion of foreign shareholders. The data set is constructed from the annual reports of 233 companies over five consecutive years and performed a Tobit regression model (also known as censored regression). A robustness test was conducted to enhance the reliability of the model, with the dependent variable being the dividend payment decision. The study's findings furnish empirical support for a research hypothesis, the proportion of government shareholders exerts a positive influence on the dividend payout ratio. This indicates that foreign shareholders do not have compelling reasons to actively engage in monitoring the company, and therefore they demand a higher dividend payout in order to reduce potential agency costs - the costs that arise from the potential misalignment of interest between management of company and the shareholders and compensate for the risks they bear. Additionally, companies with a higher percentage of state ownership tend to pay higher dividends which signal positive operational performance to attract additional investment capital and enhance the credibility of the state.