Ownership structure and dividend policy in jordan

Abstract EN

This study aims to examine the effect of ownership structure on dividend policy of Jordanian manufacturing companies listed in Amman stock exchange.

More specifically, the study examine several hypotheses regarding the relationship between ownership structure (namely: concentration, foreign, institutional, and managerial) and dividend policy.

To achieve study objective, this study uses a combination of time-series and cross-section data.

Five year (2014-2018) panel data of 61 companies are examined.

In order to test the study hypotheses, the study conduct F-test, Lagrange Multiplier test (LM- test), and the Hausman test to determine the best statistical method (ordinary least squares method (OLS), fixed effects or random effects models).

The empirical findings of this study show that all the ownership variables (ownership concentration, institutional ownership, and managerial ownership are insignificant in affecting the dividend policy, and the direction of the relationship is positive except a negative relationship between foreign ownership and dividend policy.

Also, the empirical finding showed that the company size and return on assets (ROA) were found to have a significant positive effect on dividend policy, where as leverage was found to have a significant negative effect on dividend policy.