Foreign institutional investors and dividend policy in Indonesia
In this study, we investigate the nexus between foreign institutional investors (FIIs) and the dividend policy in a developing country. Using a dataset of 529 Indonesian publicly listed firms between 2010 and 2018, we find that the presence of FIIs has a significant and negative effect on firms’ div...
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| Veröffentlicht in: | Journal of asset management 2022-05, Vol.23 (3), p.235-245 |
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| container_title | Journal of asset management |
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| creator | Purba, Sangapta Damarjati Risfandy, Tastaftiyan Muizzuddin, Muizzuddin Nugroho, Muh. Rudi |
| description | In this study, we investigate the nexus between foreign institutional investors (FIIs) and the dividend policy in a developing country. Using a dataset of 529 Indonesian publicly listed firms between 2010 and 2018, we find that the presence of FIIs has a significant and negative effect on firms’ dividend policy. However, we further find that the negative impact diminishes in firms with a low FII share. In the Indonesian case, although dividends could be used as a mechanism to reduce agency problems caused by information asymmetry, FIIs possibly prefer capital gains because they are subject to a higher dividend tax than domestic investors. Our study contributes to the discussion on the dividend payment puzzle, especially in developing countries. |
| doi_str_mv | 10.1057/s41260-022-00259-z |
| format | Article |
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| ispartof | Journal of asset management, 2022-05, Vol.23 (3), p.235-245 |
| issn | 1470-8272 1479-179X |
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| source | Springer Nature - Complete Springer Journals |
| subjects | Asymmetry Capital gains Cash flow Datasets Developing countries Dividend policy Economics and Finance Finance Financial Services Institutional investments LDCs Net present value Original Article Risk Management Shareholder meetings Stockholders Tax rates Tax regulations |
| title | Foreign institutional investors and dividend policy in Indonesia |
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