The Effect of Ownership Structures on Dividend Policy: Evidence from Jordan

Abstract

Undoubtedly, dividend policy is an important component of companies that is in need to be investigated as it is found in literature to be an interesting issue. Therefore, the study purpose is to identify the influence of ownership structures involving family ownership, government ownership, private ownership, foreign ownership as independent variables. In addition, this study includes significant control variables involving firm size, future growth opportunity, free cash flow, and leverage. In fact, these factors added significance to the study. In order to fulfill the research objective, the analysis of descriptive statistics and regression were implemented. The sample of this study included public and private Jordanian companies listed in Amman Stock Exchange and they were 191 companies from 2014 to 2018.The results conclude that there is a strong relationship between the ownership structures, control variables used, and dividend policy. However, some hypotheses are not supported, while two of them are supported.  Ownership structure is an important factor to be always target for researchers and organizations. Besides, future studies are recommended to see other ownership structures such as managerial and institutional ones as they could support such findings and/or add some valuable information.

Keywords: Dividend Policy, Family Ownership, Government Ownership, Private Ownership, Foreign Ownership, Firm Size, Future Growth Opportunity, Free Cash Flow, Leverage.

DOI: 10.7176/RJFA/11-12-14

Publication date:June 30th 2020