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Browsing by Author "Faccio, Mara"

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    Dividends and Exploration
    (Te Herenga Waka—Victoria University of Wellington, 2000) Faccio, Mara; Lang, Larry H.P.; Leung, Joanne
    In Western Europe and East Asia capital markets require higher dividends from corporations tightly affiliated (at the 20% level of control) to a group and within a group from corporations whose controlling shareholder has a lower ratio O/C of ownership to control rights. For loosely-affiliated corporations (whose controlling shareholder holds between 10% and 20% of control rights) dividends are positively related to O/C reflecting expropriation not contained by capital markets. Such corporations comprise 2.94% of European corporations but 15.44 % of Asian corporations. In our 9 Asian economies the 11 largest groups at the 10% level comprise 53.75% of all corporations and 84.58% of loosely-affiliated corporations so most expropriation occurs here. Dividend are higher in Europe than in Asia; having multiple large shareholders increases dividends in Europe but decreases them in Asia.