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Title:Dividend policy and institutional ownership : empirical evidence using a propensity score matching estimator PDF Logo
Authors:Hofler, Richard
Elston, Julie Ann
Lee, Junsoo
Issue Date:2004
Series/Report no.:Papers on entrepreneurship, growth and public policy 2704
Abstract:This study investigates the relationship between institutional ownership and dividend payout behavior of the firm in Germany. Using a propensity scoring method estimator to control for endogeneity problems, we find evidence that neither institutional ownership nor bank control is statistically significant in determining dividend payouts. These findings are consistent with stylized facts regarding the nature of the German institutional environment, which, through the rights of management to retain a significant percentage of the net profits of the firm and lack of tax incentives, reduce agency costs associated with conflicts between management and shareholder interests regarding use of the firm's free cash flow.
Document Type:Working Paper
Appears in Collections:Discussion Papers on Entrepreneurship, Growth and Public Policy, Max-Planck-Institut für Ökonomik

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