Dividend Policy and Ownership Structure: An Applied Study on Industrial Companies in Amman Stock Exchange

Abstract

This study aims to determine whether ownership structure is linked to the dividend policy on industrial companies are listed in ASE.

The study sample consisted of sixty two industrial firms listed in ASE from (2000-2006).In order to achieve the objective of the study, annually dividend and annual report publications of public shareholding firms held by ASE. The Tobit model or censored regression model specification was used to test the study hypotheses for the level of dividends paid. The study was found more than half (55%) of the firm observation in our sample have zero dividends. Results shows that ownership dispersion as measured by the natural log of the number of stockholders (STOCK) seems to be not related to dividend policy in Jordan since it was insignificant in both analyses, Tobit and OLS. The fraction held by insiders (INSD), has negative impact on the level of dividends paid. The other ownership, family is negatively but not significantly, and institution is positively and significant influence on the dividend policy, the multiple ownership is negative and insignificant, the finally variable for ownership is foreigner positive and insignificant.