The Monitoring Role of Multiple Large Shareholders and the Catering Effect of Dividends: Evidence from Poland

• Autorzy: Aleksandra Pieloch-Babiarz
• Języki publikacji: EN

Abstrakty

EN

On the world capital markets, there is a lack of research on how multiple large shareholders (MLS) monitoring of the first largest shareholder affects the catering effect of dividends. To fill this research gap, one should ascertain whether MLS control the first largest shareholder to align pay-outs with investor sentiment for dividends. Therefore, the aim of this article is to assess the integrated MLS impact on the strength of the catering effect of dividends. The study covers Polish electrotechnical companies in 2009-2020 with the use of fixed effects models. The value added is that the paper presents the results of novel research concerning the impact of MLS on dividends. The main findings are: 1) the strongest catering effect is observed when the total number of shares held by MLS is large; 2) the catering effect weakens most when the first largest shareholder is a controlling shareholder and the second largest owner holds relatively many shares. (original abstract)

Słowa kluczowe

EN

Dividend; Shareholders; Capital market; Stock exchange

PL

Dywidenda; Akcjonariusz; Rynek kapitałowy; Giełda

• Czasopismo: Economics and Business Review
• Rocznik: 2021
• Tom: 7 (21)
• Numer: nr 4
• Strony: 72--93

Twórcy

autor

Aleksandra Pieloch-Babiarz

• University of Lodz, Poland

Bibliografia

• Attig, N., Guedhami, O., & Mishra, D. (2008). Multiple large shareholders, control contests, and implied cost of equity. Journal of Corporate Finance, 14, 721-737.
• Baker, M., & Wurgler, J. (2004). A catering theory of dividends. The Journal of Finance, 59, 1125-1165.
• Boubaker, S., & Sami, H. (2011). Multiple large shareholders and earnings informativeness. Review of Accounting and Finance, 10(3), 591-614.
• Boubaker, S., Manita, R., & Rouatbi, W. (2021). Large shareholders, control contestability and firm productive efficiency. Annals of Operations Research, 296(1), 1-24.
• Cai, C.X., Hillier, D., & Wang, J. (2016). The cost of multiple large shareholders. Financial Management, 45(2), 401-430.
• Cao, F., Pengb, S., & Ye, K. (2019). Multiple large shareholders and corporate social responsibility reporting. Emerging Markets Review, 38, 287-309.
• Casado, R.B., Burkert, M., Dávila, A., & Oyon, D. (2016). Shareholder protection: The role of multiple large shareholders. Corporate Governance: An International Review, 24(2), 105-129.
• Cheng, M., Lin, B., Lu, R., & Wei, M. (2020). Non-controlling large shareholders in emerging markets: Evidence from China. Journal of Corporate Finance, 63(C), 1-22.
• Cheng, M., Lin, B., & Wei, M. (2013). How does the relationship between multiple large shareholders affect corporate valuations? Evidence from China. Journal of Economics and Business, 70, 43-70.
• DeAngelo, H., DeAngelo, L., & Stulz, R. (2006). Dividend policy and the earned/contributed capital mix: A test of the life-cycle theory. Journal of Financial Economics, 81(2), 227-254.
• Denis, D.J., & Osobov, I.V. (2008). Why do firms pay dividends? International evidence on the determinants of dividend policy. Journal of Financial Economics, 89(1), 62-82.
• Eije, H., & Megginson, W.E. (2008). Dividends and share repurchases in the European Union. Journal of Financial Economics, 89, 347-374.
• Fama, E.F., & French, K.F. (2001). Disappearing dividends: Changing firm characteristics or lower propensity to pay?. Journal of Financial Economics, 60(1), 67-79.
• Gama, A.P.M. (2012). The role of multiple large shareholders in public listed firms: An overview. Heidelberg, Berlin: Springer-Verlag.
• Gyimah, D., & Gyapong, E. (2021). Managerial entrenchment and payout policy: A catering effect. International Review of Financial Analysis, 73, 1-18.
• Harada, K., & Nguyen, P. (2011). Ownership concentration and dividend policy in Japan. Managerial Finance, 37(4), 362-379.
• Jara, M., López-Iturriaga, F., San-Martín, P., & Saona, P. (2019). Corporate governance in Latin American firms: Contestability of control and firm value. BRQ Business Research Quarterly, 22(4), 257-274.
• Jensen, M.C., & Meckling, W. (1976). Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3, 305-360.
• Jentsch, V. (2019). Board composition, ownership structure and firm value: Empirical evidence from Switzerland. European Business Organization Law Review, 20, 203-254.
• Jeong, J., & Piao, W. (2019). The effect of multiple large shareholders on the firm's value in China. Advances in Economics, Business and Management Research, 106, 15-20.
• Jiang, F., Cai, X., Jiang, Z., & Nofsinger, J.R. (2019). Multiple large shareholders and dividends: Evidence from China. Pacific-Basin Finance Journal, 57(C), 6-83.
• Jiang, F., Cai, W., Wang, X., & Zhu, B. (2018). Multiple large shareholders and corporate investment: Evidence from China. Journal of Corporate Finance, 50, 66-83.
• Jiang, Z., Kim, K.A., Lie, E., & Yang, S. (2013). Share repurchases, catering, and dividend substitution. Journal of Corporate Finance, 21(1), 36-50.
• Julio, B., & Ikenberry, D. (2004). Reappearing dividends. Journal of Applied Corporate Finance, 16, 89-100.
• Li, W., & Lie, E. (2006). Dividend changes and catering incentives. Journal of Financial Economics, 80(2), 293-308.
• López-Iturriaga, F.J., & Santana-Martín, D.J. (2015). Do shareholder coalitions modify the dominant owner's control? The impact on dividend policy. Corporate Governance: An International Review, 23(6), 519-533.
• Maury, B., & Pajuste, A. (2004). Multiple large shareholders and firm value. Journal of Banking and Finance, 29(7), 1813-1834.
• Neves, E. (2014). Ownership structure and investor's sentiments for dividends. International Journal of Financial Research, 5(2), 33-58.
• Pieloch-Babiarz, A. (2015). Catering approach to the dividend payment policy on the Warsaw Stock Exchange. Equilibrium. Quarterly Journal of Economics and Economic Policy, 10(2), 185-206.
• Pieloch-Babiarz, A. (2020). Managerial ownership and catering to investor sentiment for dividends: Evidence from the electromechanical industry sector on the Warsaw Stock Exchange. Oeconomia Copernicana, 11(3), 467-483.
• Pieloch-Babiarz, A. (2021). The impact of shareholders interactions on the adjustment of pay-out to investor sentiment for dividends. (Proceedings of the 11th International Conference on Applied Economics Contemporary Issues in Economy: Finance).
• Ramli, N.M. (2009). Large shareholders, Payout policy and agency problems in Malaysian companies. Journal of Accounting and Finance, 11(3), 97-112.
• Rossi, F., Barth, J.R., & Cebula, R.J. (2018). Do shareholder coalitions affect agency costs? Evidence from Italian-listed companies. Research in International Business and Finance, 46, 181-200.
• Safii, A.A., & Asyik, N.F. (2019). The role of blockholders on dividends policy of Indonesian public listed companies. (Proceeding Book 7th Asian Academic Society International Conference, 454-458).
• Stock Market Yearbook. (2021). Retrieved September 10, 2021 from https://www.gpw.pl/biblioteka-gpw-lista?gpwlc_id=10

Identyfikatory

DOI

10.18559/ebr.2021.4.5