The effect of foreign ownership on dividend policy : The case of listed companies on hose

Abstract

The main purpose of this thesis is to examine the relationship between foreign ownership and cash dividend payout policy of listed companies on HOSE that have more than 5 percent foreign ownership on Ho Chi Minh Stock Exchange (HOSE) The data is collected from Vietstock.vn consisting of 95 companies with 5% to 49% foreign ownership on HOSE during the period of 2008-2012. After conducting some tests and models to find out which ones are the most suitable, the study comes up with the Random Effects model , which is used to test hypothesis. The result has showed that the foreign ownership has no significant relationship with cash dividend payout ratio. The study also reveals thatfirm‟s size and profitability have negative relationship with dividend payout ratio. The result is inconsistent with the transaction cost theory and agency cost theory. It may be due to the unique features of Vietnamese market in the recession period from 2008 to 2012.