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The relationship between institutional ownership is divided per share has been a topic of debate among theoretical and empirical researchers. Successful companies earn income that can invest in operating cost minimizing risk and use the retire debt or distributed to share holders. Companies have different ownership structure depend on the firm size. Demographic and other Socio Cultural as well as technological factors. This research makes an attempt to determine institutional ownership and dividend per share. For this purpose 20 most important industries from KSE has been selected that comprise of 42 firms from the year 2001 to 2006. The empirical analysis is based on the partial adjustment model of Lintner (1956) and the cost minimization Model of Rozeff (1982). The model developed by Rozeff (1982) is employed with pooled regression, fixed effects model and random effects model. In the fixed effects model, dummy variables for a number of firms were significant. This rendered the use pooled effects model inappropriate. To choose between fixed effects model and random effects model, the Hausman (1978) test is applied. The results of this test favor the use of random effects model. The results of Lintner Model suggest that firms follow a target dividend policy with adjustment process. A number of ownership variables were also found to be significantly influencing the dividend decisions.
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In-Text Citation: (Saif et al., 2013)
To Cite this Article: Saif, N., Rehman, Khan, M. S., Rehman, K., Ali, A., Khan, A., & Khan, Q. (2013). Institutional Ownership and Dividend per Share: Case of Pakistan. International Journal of Academic Research in Accounting Finance and Management Sciences, 3(1), 524–542.
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