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.
DOI
10.1108/03074350810915879
Publication Date
2008-10-17
Publication Title
Managerial Finance
Volume
34
Issue
12
Publisher
Emerald
ISSN
0307-4358
Embargo Period
2024-11-19
First Page
953
Last Page
964
Recommended Citation
Abdelsalam, O., El‐Masry, A., & Elsegini, S. (2008) 'Board composition, ownership structure and dividend policies in an emerging market', Managerial Finance, 34(12), pp. 953-964. Emerald: Available at: https://doi.org/10.1108/03074350810915879
