MANAGERIAL OWNERSHIP AND DIVIDEND POLICY: A CONCEPTUAL REVIEW
AbstractBusiness firms often face the problem of allocation of earnings as to whether to distribute among shareholders or retain some portion of the profits for reinvestment. Thus, the payment of dividend depends to a large extent on the corporate governance practice of a firm especially in terms of managerial ownership. This paper is, therefore, aimed at examining the role of managerial ownership in influencing dividend policies of firms particularly in developing economies using a literature-based approach. Several empirical and conceptual works have been examined. It is concluded that firm's dividend policy is one of the most important financial decisions and responsibility of management because dividend is not only a source of income for shareholders, but acts as an indicator to judging the performance of the firm. It is also concluded that managerial ownership plays significant role in dividend policy decisions of firms.
Authors who publish with this journal agree to the following terms:
Authors grant the journal copyright
Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.