Dividends and Exploration

Mara Faccio, Larry H.P. Lang and Joanne Leung

No 19016, Working Paper Series from Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation

Abstract: In Western Europe and East Asia capital markets require higher dividends from corporations tightly affiliated (at the 20% level of control) to a group and within a group from corporations whose controlling shareholder has a lower ratio O/C of ownership to control rights. For loosely-affiliated corporations (whose controlling shareholder holds between 10% and 20% of control rights) dividends are positively related to O/C reflecting expropriation not contained by capital markets. Such corporations comprise 2.94% of European corporations but 15.44 % of Asian corporations. In our 9 Asian economies the 11 largest groups at the 10% level comprise 53.75% of all corporations and 84.58% of loosely-affiliated corporations so most expropriation occurs here. Dividend are higher in Europe than in Asia; having multiple large shareholders increases dividends in Europe but decreases them in Asia.

Keywords: dividends; Asian economies (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:vuw:vuwcsr:19016

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