IDEAS home Printed from https://ideas.repec.org/a/bla/afrdev/v31y2019i4p409-422.html
   My bibliography  Save this article

Do Shareholders Fight for Firm Value or Market Value in Emerging Markets? The Mediating Effect of Board Structure Dynamics on Dividend Policy Decision

Author

Listed:
  • Daniel Ofori‐Sasu
  • Joshua Yindenaba Abor
  • Sydney Quaye

Abstract

The paper examines the mediating effect of board structure dynamics on the relationship between dividend payout and shareholders’ wealth at the firm level and market level. Panel regression models are used by applying data from 27 listed firms in Ghana between 2010 and 2017. We find that board structure dynamics have a direct effect on shareholders’ wealth at both levels. However, the results reveal new evidence that board structure dynamics play a mediating role on the relationship between dividend policy decision and shareholders’ wealth only at the market level. We find that independent directors and CEO duality significantly reduce market value of shareholders through dividend payout decision. However, independent directors and longer CEO tenure in office mediate a positive effect on the relationship between dividend policy and shareholders’ wealth at the market level. Thus, the mediating effect of board structure dynamics, particularly independent directors and CEO tenure, are important in predicting a positive relationship between dividend policy and shareholders’ wealth at the market level than at the firm level. Therefore, regulatory bodies and investors should provide strong board structure dynamics that serve as a mediating mechanism for prudent dividend policy decisions that add value to shareholders’ wealth.

Suggested Citation

  • Daniel Ofori‐Sasu & Joshua Yindenaba Abor & Sydney Quaye, 2019. "Do Shareholders Fight for Firm Value or Market Value in Emerging Markets? The Mediating Effect of Board Structure Dynamics on Dividend Policy Decision," African Development Review, African Development Bank, vol. 31(4), pages 409-422, December.
    • Handle: RePEc:bla:afrdev:v:31:y:2019:i:4:p:409-422
    DOI: 10.1111/1467-8268.12401
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1467-8268.12401
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1467-8268.12401?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jonas Ladime & Rayenda Khresna Brahmana, 2021. "Role of controlling shareholders on the performance of efficient African banks," African Development Review, African Development Bank, vol. 33(2), pages 316-328, June.
    2. Ayman Hassan Bazhair & Mohammed Naif Alshareef, 2022. "Dynamic relationship between ownership structure and financial performance: a Saudi experience," Cogent Business & Management, Taylor & Francis Journals, vol. 9(1), pages 2098636-209, December.
    3. Benjamin Amoah, 2024. "The story of dividend payment and corporate cash flow in Ghana," African Development Review, African Development Bank, vol. 36(1), pages 30-40, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:afrdev:v:31:y:2019:i:4:p:409-422. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/afdbgci.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.