Investigation of the Relationship between Ownership–Control Discrepancy and Dividend Policy in Tehran Stock Exchange

Sakineh Darvishzadeh (), Zeinolabedin Sadeghi () and Ahmad Khodamipour ()
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Sakineh Darvishzadeh: Islamic Azad University
Zeinolabedin Sadeghi: Shahid Bahonar University of Kerman
Ahmad Khodamipour: Shahid Bahonar University of Kerman

International Journal of Academic Research in Accounting, Finance and Management Sciences, 2013, vol. 3, issue 3, 266-274

Abstract: Present research examines the relation between the ownership-control discrepancy the major shareholder and dividend policy in Tehran Stock Exchange. This research focuses on the effect of the conflicts of interests between majority shareholders and minority shareholders on firms’ dividend policy, because dividend policy can serve as a replacement for this the conflicts of interests. In this research, Investigation all firms in Tehran Stock Exchange that serves the annual reports for the years 2007 through 2010. In a total the selection 134 firms of different industries. The test of the proposed hypotheses conducted on a panel data. In a total research results show that the influence of the ownership to control ratio of the largest shareholder (OWCONT) on dividend payout rate is significantly positive. Indeed, the more this ratio is high, the more the control is low and payout is high. In contrast, if the largest shareholder has a controlling power that exceeds his/her cash flow right, payout is low. Furthermore, control power is significantly related to the dividend policy.

Keywords: Dividend policy; Ownership and control; Voting power; Agency conflicts; Banzhaf power index (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:hur:ijaraf:v:3:y:2013:i:3:p:266-274

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