IDEAS home Printed from https://ideas.repec.org/a/wsi/afexxx/v08y2013i02ns2010495213500115.html
   My bibliography  Save this article

Dividends, Controlling Shareholders And Firm Performance: An Investigation Of Large Firms On The Hong Kong Stock Exchange

Author

Listed:
  • TINA T. HE

    (Division of Business and Management, BNU-HKBU, United International College, Zhuhai, Guangdong, China)

  • WILSON X. B. LI

    (Division of Business and Management, BNU-HKBU, United International College, Zhuhai, Guangdong, China)

  • GORDON Y. N. TANG

    (Department of Finance and Decision Sciences, Hong Kong Baptist University, Kowloon, Hong Kong)

Abstract

This study examines whether dividends payout has a positive contribution to firm performance while taking into account the important firm level characteristics such as the divergence between the control rights and the ownership rights of controlling shareholders and firm leverage. Investigating the large firms listed on the Main Board of Hong Kong Stock Exchange over the 1998–2007 period, we find that dividends payout has statistically significantly positive impacts on both return on assets (ROA) and Tobin's Q, particularly after controlling for the nonlinear relation between dividends and firm performance and between control rights of the controlling shareholder and firm performance. The regression results do not show significant interaction effect between dividends payout and control divergence on firm performance. But the impact of dividends payout on firm performance is different in family controlled firms versus state controlled firms and varies with institutional factors.

Suggested Citation

  • Tina T. He & Wilson X. B. Li & Gordon Y. N. Tang, 2013. "Dividends, Controlling Shareholders And Firm Performance: An Investigation Of Large Firms On The Hong Kong Stock Exchange," Annals of Financial Economics (AFE), World Scientific Publishing Co. Pte. Ltd., vol. 8(02), pages 1-33.
  • Handle: RePEc:wsi:afexxx:v:08:y:2013:i:02:n:s2010495213500115
    DOI: 10.1142/S2010495213500115
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S2010495213500115
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://libkey.io/10.1142/S2010495213500115?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. N/A, 2007. "Fuel for Thought: April – June 2007," Energy & Environment, , vol. 18(6), pages 815-816, November.
    2. Unknown, 2007. "Indicators June-07," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, pages 1-3, June.
    3. Edina M. S. Luz & F. W. S. Lima, 2007. "Majority-Vote On Directed Small-World Networks," International Journal of Modern Physics C (IJMPC), World Scientific Publishing Co. Pte. Ltd., vol. 18(08), pages 1251-1261.
    4. W-C Yeh, 2007. "Reply to Jane," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 58(10), pages 1395-1395, October.
    5. Secretariat, 2007. "Activities of JSCES in 2006–2007," The Journal of Comparative Economic Studies (JCES), The Japanese Society for Comparative Economic Studies (JSCES), vol. 3, pages 57-58, December.
    6. George Cheriyan & K.C. Sharma & J.V.R. Murty & Sanjay Agarwal & Parmesh Shah, 2007. "Rajasthan, India," World Bank Publications - Reports 25019, The World Bank Group.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Leif Denti & Sven Hemlin, 2012. "Leadership And Innovation In Organizations: A Systematic Review Of Factors That Mediate Or Moderate The Relationship," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 16(03), pages 1-20.
    2. Emanuele Bacchiega & Luca Lambertini & Andrea Mantovaini, 2011. "Process And Product Innovation In A Vertically Differentiated Industry," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 13(02), pages 209-221.
    3. Tania Bucic & Liem Viet Ngo, 2012. "Examining Drivers Of Collaborative Inbound Open Innovation: Empirical Evidence From Australian Firms," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 16(04), pages 1-24.
    4. Peter Lindelöf, 2011. "Formal Institutional Contexts As Ownership Of Intellectual Property Rights And Their Implications For The Organization Of Commercialization Of Innovations At Universities — Comparative Data From Swede," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 15(05), pages 1069-1092.
    5. Hiromi Saito & Koichi Sumikura, 2010. "An Empirical Analysis On Absorptive Capacity Based On Linkage With Academia," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 14(03), pages 491-509.
    6. Emmanuel Mamatzakis & Panos Remoundos, 2012. "What are the Driving Factors Behind the Rise of Spreads and CDS of Eurozone Sovereign Bonds? A Panel VAR Analysis," Global Credit Review (GCR), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 79-94.
    7. X. F. Pan & Aiguo Xu & Guangcai Zhang & Song Jiang, 2007. "Lattice Boltzmann Approach To High-Speed Compressible Flows," International Journal of Modern Physics C (IJMPC), World Scientific Publishing Co. Pte. Ltd., vol. 18(11), pages 1747-1764.
    8. Wen-Bo Du & Xian-Bin Cao & Hao-Ran Zheng & Hong Zhou & Mao-Bin Hu, 2009. "Evolutionary Games In Multi-Agent Systems Of Weighted Social Networks," International Journal of Modern Physics C (IJMPC), World Scientific Publishing Co. Pte. Ltd., vol. 20(05), pages 701-710.
    9. Erlend Nybakk & Jan Inge Jenssen, 2012. "Innovation Strategy, Working Climate, And Financial Performance In Traditional Manufacturing Firms: An Empirical Analysis," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 16(02), pages 1-26.
    10. Erlend Nybakk, 2012. "Learning Orientation, Innovativeness And Financial Performance In Traditional Manufacturing Firms: A Higher-Order Structural Equation Model," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 16(05), pages 1-28.
    11. Sameer M. Ikhdair & Ramazan Sever, 2008. "Exact Solutions Of The Modified Kratzer Potential Plus Ring-Shaped Potential In Thed-Dimensional Schrödinger Equation By The Nikiforov–Uvarov Method," International Journal of Modern Physics C (IJMPC), World Scientific Publishing Co. Pte. Ltd., vol. 19(02), pages 221-235.
    12. Desheng Dash Wu & David L. Olson & Luis A. Seco & John Birge, 2011. "Introduction To The Special Issue On "Operational Research And Asia Risk Management"," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 28(01), pages 1-1.
    13. Balázs Vaszkun, 2013. "Managers Can Also Resist Changes — Can We Deal With This? An Exploratory Study From Japan," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 21(04), pages 447-493.
    14. Hwee Kwan Chow, 2014. "International Transmission Of Interest Rates And The Open Economy Trilemma In Asia," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 59(03), pages 1-18.
    15. Herwig Immervoll & Stefano Scarpetta, 2012. "Activation and employment support policies in OECD countries. An overview of current approaches," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-20, December.
    16. Stefanita Susu, 2015. "Methodology And Practical Aspects On Method For Determining The Value Added," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 2, pages 270-275, April.
    17. Pacchioli, Consuelo, 2011. "Is the EU internal market suffering from an integration deficit?," CEPS Papers 5528, Centre for European Policy Studies.
    18. T. Conlon & H. J. Ruskin & M. Crane, 2009. "Multiscaled Cross-Correlation Dynamics In Financial Time-Series," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 12(04n05), pages 439-454.
    19. repec:ilo:ilowps:413417 is not listed on IDEAS
    20. Mathieu Carrière & Marco Cuturi & Steve Oudot, 2017. "Sliced Wasserstein Kernel for Persistence Diagrams," Working Papers 2017-82, Center for Research in Economics and Statistics.
    21. Kapsos, Steven., 2008. "The gender wage gap in Bangladesh," ILO Working Papers 994134173402676, International Labour Organization.

    More about this item

    Keywords

    Dividends; firm performance; ultimate ownership; agency cost; JEL Classification: G32; JEL Classification: G34; JEL Classification: G35; JEL Classification: L25;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

    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:wsi:afexxx:v:08:y:2013:i:02:n:s2010495213500115. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/afe/afe.shtml .

    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.