Investigating the impact of four proxies of agency costs on dividend policy in the context of listed companies of small island economies: a case study of Mauritius

Boolaky, Pran Krishansing (2009) Investigating the impact of four proxies of agency costs on dividend policy in the context of listed companies of small island economies: a case study of Mauritius. International Journal of Accounting and Finance, 1 (3). pp. 276-301. ISSN 1752-8224

Abstract

The study investigates the impacts of four agency costs on the dividend policy of firms listed on the Stock Exchange of Mauritius Ltd. (SEM). It uses least squares regression to test and examine the impact of four Agency Cost Variables (ACVs), namely ownership dispersion, insider ownership, Free Cash Flow (FCF) and leverage ratio, on the Dividend Payout Decisions (DPOD) in the Mauritian-listed companies. Dividend payout is used as the dependent variable and the four mechanisms to control agency costs as independent variables. This study reports that in the context of Mauritius, FCF is significantly related to the dividend payout ratio whilst leverage and ownership dispersion are very weakly related. However, this study also reveals that insider ownership is not related to dividend policy. Therefore, the results from this study support the conclusion reached by earlier empirical researches on FCF but do not affirm the same conclusions as regards leverage, ownership dispersion and insider ownership.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Author's version unavailable.
Depositing User: Ms Christine Hazel
Faculty / Department / School: Historic - Faculty of Business - School of Accounting, Economics and Finance
Date Deposited: 26 Nov 2009 01:08
Last Modified: 02 Jul 2013 23:29
Uncontrolled Keywords: agency cost; dividend policy; listed companies
Fields of Research (FOR2008): 15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150103 Financial Accounting
14 Economics > 1402 Applied Economics > 140209 Industry Economics and Industrial Organisation
14 Economics > 1401 Economic Theory > 140104 Microeconomic Theory
Socio-Economic Objective (SEO2008): B Economic Development > 91 Economic Framework > 9102 Microeconomics > 910206 Market-Based Mechanisms
Identification Number or DOI: doi: 10.1504/IJAF.2009.026624
URI: http://eprints.usq.edu.au/id/eprint/6169

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