The first-largest shareholder and the attractiveness of investing in Polish dividend companies
DOI:
https://doi.org/10.26642/ppa-2021-1(3)-3-11Keywords:
investment attractiveness, dividend payouts, first-largest shareholder, synthetic indicator, the Warsaw Stock ExchangeAbstract
The purpose of this article is to examine the attractiveness of investing in shares of listed companies that regularly pay out dividends depending on the type of the first-largest shareholder. In order to achieve the aim of the paper, two following research questions we formulated: 1) in which companies, broken down by type of the first-largest shareholder, is the highest dividend payment observed? 2) considering the main shareholder, owning shares of which dividend companies is most beneficial for a stock market investor? Furthermore, the research hypothesis is: when investing in dividend, the most attractive investments are those companies in which the most shares are held by institutional investors and the State Treasury. The research was conducted on non-financial companies listed on the Warsaw Stock Exchange in the years 2005-2019 that regularly paid out dividends. The main research method was the classical technique for order of preference by similarity to ideal solution (i.e., TOPSIS) in which stimulants and destimulants were selected in a way which enables to assess the investment attractiveness from the point of view of a long-term stock market investor interested in dividend. Moreover, the Pearson correlation matrix and descriptive statistics were used. In order to conduct the computation we used the statistical software Statistica 13.5 and Excel.
The research revealed that the highest dividends were paid out by these companies in which the first-largest shareholder was the institutional investor. In addition, our calculations based on a synthetic indicator showed that the most attractive investments (in terms of stock market investor interested in so called ‘dividend investing’) were shares of these companies in which the main shareholder was an institutional investor, individual investor and legal person. In all these types of companies, the average value of dividend payout ratio was higher than in the entire research group. The fourth position in terms of investment attractiveness was occupied by the companies in which managers held the most shares (these companies paid out the lowest dividends in the entire research group). The last place in the ranking was taken by the companies in which the State Treasury was the main shareholder (these companies, despite the payment of high dividends, turned out not to be attractive investment due to their financial condition, and in particular, very high debt).
References
Adamska, A. (2012), «Zmiany akcjonariatu spółek publicznych w dobie kryzysu», Studia i Prace Kolegium Zarządzania i Finansów, Vol. 117, pp. 36–53.
Aluchna, M. (2007), Mechanizmy corporate governance w spółkach giełdowych, Szkoła Główna Handlowa w Warszawie – Oficyna Wydawnicza, Warszawa, 308 p.
Aydin, A.D. and Cavdar, S.C. (2015), «Corporate Governance and Dividend Policy: An Empirical Analysis From Bursa Istanbul Corporate Governance Index», Accounting and Finance Research, Vol. 4 (3), pp. 66–76, doi: http://dx.doi.org/10.5430/afr.v4n3p66.
Baker, M. and Wurgler, J. (2004), «Appearing and Disappearing Dividends: the Link to Catering Incentives», Journal of Financial Economics, Vol. 73 (2), pp. 271–288, doi: http://dx.doi.org/10.1016/j.jfineco.2003.08.001.
Claessens, S. and Djankov, S. (1999), «Ownership Concentration and Corporate Performance in the Czech Republic», Journal of Comparative Economics, Vol. 27 (3), pp. 498–513.
DeAngelo, H., DeAngelo, L. and Stulz, R. (2006), «Dividend policy and the earned/contributed capital mix: a test of the life-cycle theory», Journal of Financial Economics, Vol. 81 (2), pp. 227–254, doi: 10.1016/j.jfineco.2005.07.005.
Eije, H. and Megginson, W.L. (2008), «Dividends and share repurchases in European Union», Journal of Financial Economics, Vol. 89 (2), pp. 347–374, doi: 10.1016/j.jfine-co.2007.11.002.
Elson, J.A., Hofler, R. and Lee, J. (2011), «Dividend Policy and Institutional Ownership: Empirical Evidence using a Propensity Score Matching Estimator», Journal of Accounting and Finance, Vol. 11 (1), pp. 105–122.
Fisher, K.L. and Statman, M. (2000), «Cognitive Biases In Market Forecast», Journal of Portfolio Management, Vol. 27 (1), pp. 72–81, doi: http://dx.doi.org/10.3905/jpm.2000.319785.
Florackis, C., Kanas, A. and Kostakis, A. (2015), «Dividend policy, managerial ownership and debt financing: A nonparametric perspective», European Journal of Operational Research, Vol. 241, pp. 783–795, doi: http://dx.doi.org/10.1016/j.ejor.2014.08.031.
Gajdka, J. (2013), Behawioralne finanse przedsiębiorstw. Podstawowe podejścia i koncepcje, Publisher of the University of Lodz, Lodz, pp. 226.
Kaźmierska-Jóźwiak, B. (2014), «Czynniki polityki dywidendowej w warunkach polskich», Annales Universitatis Mariae Curie-Skłodowska, Vol. 48, pp. 129–135.
Kowerski, M. (2010), «Wpływ nastrojów gospodarczych przedsiębiorców i konsumentów na decyzje dywidendowe spółek kapitałowych», Barometr Regionalny, Vol. 2 (20), pp. 19–34.
La Porta, R., Lopez, F., Shleifer, A. and Vishny, R. (2000), «Agency problems and dividend policies around the world», Journal of Finance, Vol. 55 (1), pp. 1–33, doi: 10.1111/0022-1082.00199.
Liljeblom, E. and Maury, B. (2016), «Shareholder Protection, Ownership, and Dividends: Russian Evidence», Emerging Markets Finance & Trade, Vol. 52, pp. 2414–2433, doi: http://dx.doi.org/10.1080/1540496X.2015.1073991.
Neves, E. (2014), «Ownership structure and investors sentiments for dividends», International Journal of Financial Research, Vol. 5 (2), pp. 35–58.
Pieloch-Babiarz, A. (2017), «Determinants of payout policy and investment attractiveness of companies listed on the Warsaw Stock Exchange», Equilibrium. Quarterly Journal of Economics and Economic Policy, Vol. 12 (4), pp. 675–691, doi: 10.24136/eq.v12i4.35.
Ramli, N.M. (2010), «Ownership Structure and Dividend Policy. Evidence from Malaysian Companies», International Review of Business Research Papers, Vol. 6 (1), pp. 170–180.
Short, H., Zhang, H. and Keasey, K. (2002), «The Link Between Dividend Policy and Industrial Ownership», Journal of Corporate Finance, Vol. 8, pp. 105–122.
Smith, D.D., Pennathur, A.K. and Marciniak, M.R. (2017), «Why do CEOs agree to the discipline of dividends?», International Review of Financial Analysis, Vol. 52, pp. 38–48, doi: http://dx.doi.org/10.1016/j.irfa.2017.04.010.
Ullah, H., Fida, A. and Khan, S. (2012), «The Impact of Ownership Structure on Dividend Policy. Evidence form Emerging Markets KSE-100 Index Pakistan», International Journal of Business and Social Science, Vol. 3 (9), pp. 289–307.
Wang, P., Li, Y., Wang, Y.H., and Zhu, Z.Q. (2015), «A new method based on TOPSIS and Response Surface Method for MCDM problems with interval numbers», Mathematical Problems in Engineering, April, doi: 10.1155/2015/ 938535.
Wawryszuk‑Misztal, A. (2016), «Zmiany w strukturze akcjonariatu polskich spółek giełdowych zmieniających rynek notowań akcji», Acta Universitatis Lodziensis. Folia Oeconomica, Vol. 4 (323), pp. 141–153.
Wypych, M. (2015), «Koncentracja własności a wypłata dywidend na przykładzie przemysłowych spółek giełdowych», Zeszyty Naukowe Uniwersytetu Szczecińskiego. Finanse, Rynki Finansowe, Ubezpieczenia, Vol. 73, pp. 783–792.
Yoon, K. (1987), «A reconciliation among discrete compromise solutions», Journal of the Operational Research Society, Vol. 38 (3), pp. 277–286, doi: 10.1057/jors.1987.44.
Zhang, H. (2015), «Application on the entropy method for determination of weight of evaluating index in fuzzy mathematics for wine quality assessment», Advance Journal of Food Science and Technology, Vol. 7 (3), pp. 195–198, doi: 10.19026/ajfst.7.1293.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2021 Aleksandra Pieloch-Babiarz
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- 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 (See The Effect of Open Access).
