Ect of Blockholder Ownership on Dividend Policies: an Empirical Analysis of Firms Listed on Nse
Abstract
The research was necessitated by the need to understand the effect of Block holders on
dividend policy of firms. The study attempted to answer the following questions: Does
the ownership structure have an effect on the dividend policies of quoted companies? Are
the Kenyan financial decision makers sensitive to the influence of blockholder owners
while making dividend decisions? Does the fear of expropriation by minority investors
lead to payment of higher dividends by quoted firms?
The study used descriptive secondary data from Nairobi Stock Exchange data base and
the individual financial statements of the firms. The dividends payments, earnings per
share and ownership structures were used. The dividend declared and the dividend payout
ratios were calculated and analyzed using regression and correlation analysis.
The results indicate that firms with block holders tend to give higher dividends compared
to firms with higher state ownership, foreign ownership and individual ownership. In
conclusion there is a positive relationship between the block holders and dividend policy
since firms with higher block holder ownership have been observed to have higher
dividend payout ratios.
Sponsorhip
The University of NairobiPublisher
School of Business, University of Nairobi