Institutional ownership and corporate value

Institutional ownership and corporate value Essay example
High school
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Finance & Accounting
Pages 11 (2761 words)
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Declaration I have tried my best to consider every aspect of ethics while conducting this research and I did not perform any unethical act, which can damage reputation of my university and family. [Name of Student] Acknowledgement I praise the Lord Allah almighty the most compassionate and the most merciful for his bless…

Introduction

Abstract Institutional investors are a significant financial market force. They are rapidly replacing individual investors in the capital market. Unlike individual investors, institutional investors invest large amounts of their company resources into various stocks and shares, thereby devoting many of their resources to monitoring their investment. This paper investigates whether a company’s dividend policy is affected by the level of institutional ownership. The paper focuses on Kuwaiti public companies that are listed on the Kuwait stock exchange (KSE). This study examines the implications of corporate governance on dividend policy. It focuses on the cross-sectional relationship of the organizational ownership structures and dividend payout policies. In this paper, a regression model is employed to explore the link between institutional ownership and cash dividends. The dependent variable, cash dividends, is measured by using two different proxies. The independent variable, institutional ownership, is measured as the natural logarithm of shares held by institutional investors, then scaled by the number of shares outstanding. The control variables include returns on equity, firm size, leverage, firm age, financial loss, year effects, and industry effects. ...
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