African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4164

Full Length Research Paper

Institutional shareholdings and corporate dividend policy in Pakistan

Talat Afza1 and Hammad Hassan Mirza2*
1COMSATS Institute of Information Technology, Lahore, Pakistan. 2Department of Business Administration, University of Sargodha, Sargodha 40100, Pakistan.  
Email: [email protected]

  •  Accepted: 27 May 2011
  •  Published: 30 September 2011


The present study investigates the impact of institutional ownership and growth opportunities on dividend policy based on the sample of 120 Listed Companies of Karachi Stock Exchange (KSE), Pakistan, during 2002 to 2007. The estimated results, using OLS and Tobit regression models, suggest that dividend payouts are positively affected by growth opportunities, proportion of shares held by insurance companies and profitability and negatively affected by leverage. However, no significant impact of ownership by Modarbah, NIT and miscellaneous institutions on dividend payout is observed. Large companies are less likely to pay high dividends but the relationship of size with dividend payout is insignificant. Estimated results are robust to alternative proxy of dividend policy that is, Dividend Intensity.


Key words: Dividend policy, growth opportunities, institutional ownership, Tobit regression.