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Foreign Ownership and Corporate Dividend Policy in Cameroon

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  • Marius Ayou Bene

Abstract

This article analyzes the relationship between foreign ownership and dividend policy in the Cameroonian context, based on a sample of 197 companies observed over the period 2015-2017. This relationship is estimated using simultaneous equations to account for endogeneity bias. The results show that foreign ownership negatively influences dividend policy, and vice versa. However, these bidirectional links are not linear, but they assume U-shape forms. That is, low levels of foreign ownership are associated with low dividends, while the dividend increases as foreign shares get higher. Similarly, companies paying low dividends attract few foreign shareholders. The latter increases their shareholding when the dividend payout is high. Furthermore, dividend policy is dynamic in Cameroonian companies, as the current dividend is determined by the previous year's.

Suggested Citation

  • Marius Ayou Bene, 2023. "Foreign Ownership and Corporate Dividend Policy in Cameroon," Applied Economics and Finance, Redfame publishing, vol. 10(3), pages 41-56, August.
    • Handle: RePEc:rfa:aefjnl:v:10:y:2023:i:3:p:41-56
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    References listed on IDEAS

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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