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Corporate governance and dividend policy

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Abstract

The long-term return behaviour of dividend-changing firms has been investigated in the study and it is estimated that 23 percent only incremental profits are transformed into dividend. The remaining profits are utilized for the additional investment. It is also concluded that concentration of ownership is also an important factor of the dividend payments. The results support the hypothesis that companies start to pay dividends after a certain level of growth. At the earlier stage companies concentrate on retained earnings. The Ordinary Least Square (OLS) technique has been applied in the study and the model has been estimated through the pooled data of annual audited accounts of 180 listed companies of the Karachi Stock Exchange.

Suggested Citation

  • Mehar, Ayub, 2002. "Corporate governance and dividend policy," MPRA Paper 619, University Library of Munich, Germany, revised 2003.
    • Handle: RePEc:pra:mprapa:619
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Dividend Policy; OLS; ; Ownership Structure; Retained Earnings;
    All these keywords.

    JEL classification:

    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • 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
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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