Corporate governance and dividend policy

Muhammad Ayub Mehar

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Dividend Policy; OLS; Ownership Structure; Retained Earnings (search for similar items in EconPapers)
JEL-codes: G32 G34 G35 M41 (search for similar items in EconPapers)
Date: 2002, Revised 2003
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Published in Pakistan Economic and Social Review 1.XLIII(2005): pp. 115-128

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