The moderating effect of shareholder features on dividend disbursement: evidence from Indonesia

Dividend policy, as part of corporate governance, is largely dependent on the institutional environment in which companies operate. The study aims to determine factors affecting dividend policy in the conditions of the Ukrainian underdeveloped stock market, legal insecurity of minority shareholders, high cost and concentration of capital. For this purpose, hypotheses about the impact of a company’s financial state, size, business risk, and ownership structure on dividend payments were tested using a sample of 58 Ukrainian non-financial public joint-stock companies and applying Interactive tree classification techniques (C&RT). The resulting classification model for predicting dividend decisions correctly classifies 92.86% of companies that paid dividends and 93.3% of companies that did not. The findings, based on the classification tree and importance scale, prove the hypothesis that companies in which individuals and institutional investors have a controlling interest are more likely to pay dividends than other non-state companies. The financial indicators accurately classify only those firms that do not pay dividends, and business risk does not affect classification accuracy at all. The paper substantiates the ways of using the study findings for economic regulation, protection of minority shareholders’ rights, and proliferation of modern corporate governance practices.

This study aims to determine the assessment of financial performance and the effect on dividend policy of banking companies listed on the Indonesia Stock Exchange in the period of 2014–2017. The assessment of the company’s financial performance is important. Results of the assessment will be consideration of financial performance for investors, one of them to predict the dividend policy. The prediction results will influence investors in making investment decisions. This study employs a quantitative approach. The assessment of financial performance is measured using variables of leverage, profitability and profit growth. They were analyzed using the multiple linear regression method. At the 0.05 significance level, the results of this study showed that the leverage has a negative and significant effect on dividend policy. Meanwhile, profitability and profit growth have no effect on dividend policy. In order to explain the influence between variables, the research is based on the theories underlying the dividend policy, namely the theory of residual dividends and smoothing theory. The results of this study support the residual dividend theory, that one of the dividend policies is determined by the company by considering the target capital structure and then distributing dividends with only the remaining profit.

The research intends to minimize agency conflict through causality effects of managerial ownership, leverage, and dividend policy, where agency conflict is still interesting issue to discuss, as it concerns the principals’ and agents’ interests. The research covers 33 go-public manufacturers in Indonesia Stock Exchange. It involves 198 samples in the period 2010–2015. It applies saturation sampling and balanced panel data. For analysis model, it applies Granger bidirectional/simultaneity analysis, with variables of managerial ownership, leverage and dividend policy.The research shows that: 1) there is no bidirectional causality between managerial ownership and leverage (5%); 2) there is no bidirectional causality between managerial ownership and dividend policy (5%); 3) there is no bidirectional causality between leverage and dividend policy (10%).