Board composition, ownership structure and dividend policies in an emerging market: further evidence from CASE 50

Omneya H. Abdelsalam, Ahmed El-Masry, Sabri El-Segini

Research output: Contribution to journalArticle

Abstract

Purpose – The purpose of this study is to examine dividend policies in an emerging capital market, in a country undergoing a transitional period. Design/methodology/approach – Using pooled cross-sectional observations from the top 50 listed Egyptian firms between 2003 and 2005, this study examines the effect of board of directors’ composition and ownership structure on dividend policies in Egypt. Findings – It is found that there is a significant positive association between institutional ownership and firm performance, and both dividend decision and payout ratio. The results confirm that firms with a higher return on equity and a higher institutional ownership distribute higher levels of dividend. No significant association was found between board composition and dividend decisions or ratios. Originality/value – This study provides additional evidence of the applicability of the signalling model in the emerging market of Egypt. It was found that despite the high institutional ownership and the closely held nature of the firms, which imply lower agency costs, the payment of higher dividend was considered necessary to attract capital during this transitional period.
Original languageEnglish
Pages (from-to)953-964
Number of pages12
JournalManagerial Finance
Volume34
Issue number12
DOIs
Publication statusPublished - 2008

Fingerprint

Dividend policy
Dividends
Emerging markets
Ownership structure
Board composition
Institutional ownership
Egypt
Payment
Signaling model
Agency costs
Board of directors
Return on equity
Firm performance
Emerging capital markets
Payout
Design methodology

Keywords

  • Egypt
  • corporate governance
  • corporate ownership
  • dividends
  • emerging markets

Cite this

Abdelsalam, Omneya H. ; El-Masry, Ahmed ; El-Segini, Sabri. / Board composition, ownership structure and dividend policies in an emerging market: further evidence from CASE 50. In: Managerial Finance. 2008 ; Vol. 34, No. 12. pp. 953-964.
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Board composition, ownership structure and dividend policies in an emerging market: further evidence from CASE 50. / Abdelsalam, Omneya H.; El-Masry, Ahmed; El-Segini, Sabri.

In: Managerial Finance, Vol. 34, No. 12, 2008, p. 953-964.

Research output: Contribution to journalArticle

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