The Impact of Ownership Concentration on Dividend Payout Policy: Evidence From Turkey

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In this study, we investigated the effect of ownership concentration on dividend payout decision. To this end, by using Random Effect Tobit Model and System Generalized Method of Moments approach we utilized the data of 116 industrial companies that are listed on the Borsa Istanbul for the period 2004-2009. The results suggest that there is a positive relationship between ownership concentration and dividend yield. In addition to concentration, firms’ profitability, leverage degree, capital expenditures and market to book value ratio also have significant impact on the dividend decision. Only considering profit distributing firms, concentration level dummy variables, profitability, market value and investment variables seems to determine the dividend rate for the company. When we divide this sample into two subgroups according to asset growth rates of the firms, dividend decisions of slow growing firms are affected by return on asset, market to book ratio as well as ownership concentration. On the other hand, ownership concentration, profitability, capital expenditures and market value are important factors for the dividend payout decisions of fast growing companies.

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Dividend Policy , Ownership Concentration , Ownership Structure

Ege Academic Review (EAR)

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Ege Academic Review (EAR)