Company Dividends and Ownership Structure: Evidence from UK Panel Data

Tehmina Khan ()

Economic Journal, 2006, vol. 116, issue 510, C172-C189

Abstract: This study investigates the relationship between dividends and ownership structure for a panel of 330 large quoted UK firms. Controlling for unobserved firm-specific effects, results indicate a negative relationship between dividends and ownership concentration. Ownership composition also matters, with a positive relationship observed for shareholding by insurance companies, and a negative one for individuals. These results are consistent with agency models in which dividends substitute for poor monitoring by a firm's shareholders but can also be explained by the presence of powerful principals who are able to impose their preferred payout policy upon firms. Copyright 2006 Royal Economic Society.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:ecj:econjl:v:116:y:2006:i:510:p:c172-c189

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