Ownership structure influencing the joint determination of dividend, leverage, and cost of capital
The article analyses inter-dependencies between dividend, capital structure, and cost of capital, factoring the ownership structure of listed firms in India, using 3SLS system approach. The study finds that family firms are dominant with concentrated ownership. Dividend, leverage, and average cost o...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2019-01-01
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| Series: | Cogent Economics & Finance |
| Subjects: | |
| Online Access: | http://dx.doi.org/10.1080/23322039.2019.1600462 |
| _version_ | 1818947078115557376 |
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| author | Abhinav Kumar Rajverma Rakesh Arrawatia Arun Kumar Misra Abhijeet Chandra |
| author_facet | Abhinav Kumar Rajverma Rakesh Arrawatia Arun Kumar Misra Abhijeet Chandra |
| author_sort | Abhinav Kumar Rajverma |
| collection | DOAJ |
| description | The article analyses inter-dependencies between dividend, capital structure, and cost of capital, factoring the ownership structure of listed firms in India, using 3SLS system approach. The study finds that family firms are dominant with concentrated ownership. Dividend, leverage, and average cost of capital are inter-linked. However, family firms pay lower dividends, consistent with family owners extracting rent from external minority shareholders. Additionally, these firms have high leverage and lower cost of capital, suggesting that family control (reputation) provides intangible value to the firms. Ownership structure plays a critical role in understanding the policy decisions in emerging markets. |
| first_indexed | 2024-12-20T08:25:11Z |
| format | Article |
| id | doaj.art-9f96bf8c4c96405a9b65e63ea00e058f |
| institution | Directory Open Access Journal |
| issn | 2332-2039 |
| language | English |
| last_indexed | 2024-12-20T08:25:11Z |
| publishDate | 2019-01-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj.art-9f96bf8c4c96405a9b65e63ea00e058f2022-12-21T19:46:52ZengTaylor & Francis GroupCogent Economics & Finance2332-20392019-01-017110.1080/23322039.2019.16004621600462Ownership structure influencing the joint determination of dividend, leverage, and cost of capitalAbhinav Kumar Rajverma0Rakesh Arrawatia1Arun Kumar Misra2Abhijeet Chandra3Institute of Rural Management AnandInstitute of Rural Management AnandIndian Institute of Technology KharagpurIndian Institute of Technology KharagpurThe article analyses inter-dependencies between dividend, capital structure, and cost of capital, factoring the ownership structure of listed firms in India, using 3SLS system approach. The study finds that family firms are dominant with concentrated ownership. Dividend, leverage, and average cost of capital are inter-linked. However, family firms pay lower dividends, consistent with family owners extracting rent from external minority shareholders. Additionally, these firms have high leverage and lower cost of capital, suggesting that family control (reputation) provides intangible value to the firms. Ownership structure plays a critical role in understanding the policy decisions in emerging markets.http://dx.doi.org/10.1080/23322039.2019.1600462family firmsownership structuredividendleveragecost of capitalsimultaneous equations |
| spellingShingle | Abhinav Kumar Rajverma Rakesh Arrawatia Arun Kumar Misra Abhijeet Chandra Ownership structure influencing the joint determination of dividend, leverage, and cost of capital Cogent Economics & Finance family firms ownership structure dividend leverage cost of capital simultaneous equations |
| title | Ownership structure influencing the joint determination of dividend, leverage, and cost of capital |
| title_full | Ownership structure influencing the joint determination of dividend, leverage, and cost of capital |
| title_fullStr | Ownership structure influencing the joint determination of dividend, leverage, and cost of capital |
| title_full_unstemmed | Ownership structure influencing the joint determination of dividend, leverage, and cost of capital |
| title_short | Ownership structure influencing the joint determination of dividend, leverage, and cost of capital |
| title_sort | ownership structure influencing the joint determination of dividend leverage and cost of capital |
| topic | family firms ownership structure dividend leverage cost of capital simultaneous equations |
| url | http://dx.doi.org/10.1080/23322039.2019.1600462 |
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