University of Twente Student Theses
Agency theory and the dividend payout ratio of Dutch publicly listed firms
Lau, A. (2013) Agency theory and the dividend payout ratio of Dutch publicly listed firms.
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Abstract: | The subject of this thesis concerns the effects of the agency problem on the dividend payout ratio of 119 Dutch publicly listed non-financial firms in 2007. The results from my research show that the dividend payout ratio of firms decreases as growth opportunities increase. These findings correspond with the outcome model of national legal governance systems. The results also show that firms utilizing preference shares as a takeover defense have higher dividend payout ratios than non-users. This may indicate that the dependence on shareholders as a source of finance is so important that they need to be assured by dividends of managers’ good intentions, which conflicts with the outcome model. This theoretical discrepancy could be explained by the heterogeneity among firms within a country that affect the dividend payout ratio more profoundly than only the effect of the national legal governance system. None of the relationships appeared to be robust, because the significance levels, coefficient values, expected signs and r-squared values differed among the various operationalizations of earnings and growth opportunities. Lastly, due to the descriptive nature of this thesis, explanations of alternative theories cannot be ruled out. Further research is needed to confirm the agency explanation of these results. |
Item Type: | Essay (Bachelor) |
Faculty: | BMS: Behavioural, Management and Social Sciences |
Subject: | 85 business administration, organizational science |
Programme: | Business Administration BSc (56834) |
Link to this item: | https://purl.utwente.nl/essays/63286 |
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