The Effect of Ownership Concentration and Composition on Dividends: Evidence from Latin America

We analyze a unique data set of publicly traded firms based in six Latin American countries to study the joint effect of ownership concentration and composition on dividend policy. We find that when ownership concentration is high and the largest investor is identified as an individual, firms tend to pay fewer dividends consistent with individual investors extracting benefits from minority shareholders. However, if the largest shareholder is based in a common law country, the dividend paid is significantly higher. Finally, greater ownership by the second largest shareholder decreases firm dividends suggesting the monitoring role of a large shareholder. © 2016 Elsevier B.V.

Blogs Publicados