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Full Length Research
Paper
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Institutional
shareholdings and corporate dividend policy in Pakistan
Talat Afza1
and Hammad Hassan Mirza2*
1COMSATS
Institute of Information Technology, Lahore, Pakistan.
*Corresponding
author. E-mail:
hammadhassan@uos.edu.pk Tel: +92-48-3210055 or
+92-48-9230818.
Accepted 27 May,
2011 |
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Abstract |
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The present study investigates the impact of institutional
ownership and growth opportunities on dividend policy based on
the sample of 120 Listed Companies of Karachi Stock Exchange (KSE),
Pakistan, during 2002 to 2007. The estimated results, using OLS
and Tobit regression models, suggest that dividend payouts are
positively affected by growth opportunities, proportion of
shares held by insurance companies and profitability and
negatively affected by leverage. However, no significant impact
of ownership by Modarbah, NIT and miscellaneous institutions on
dividend payout is observed. Large companies are less likely to
pay high dividends but the relationship of size with dividend
payout is insignificant. Estimated results are robust to
alternative proxy of dividend policy that is, Dividend
Intensity.
Key words:
Dividend policy, growth opportunities, institutional ownership,
Tobit regression.
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