Impact of Ownership Structure on Dividend Yields: A Neural Network Approach

15 Pages Posted: 15 May 2011 Last revised: 14 Jul 2021

See all articles by Tarun Kumar Soni

Tarun Kumar Soni

Fore School of Management; NITI Aayog

Date Written: May 14, 2011

Abstract

There is a general perception that corporate performance in emerging markets is inclined towards few key powerful stakeholder groups ignoring issues of corporate governance. Big players like insurance companies, financial institutions, and corporate bodies etc. which have substantial shares in companies may influence the dividend yields. The study aims at examining the link between different ownership structures and dividend yield .The paper uses panel data approach for 100 Indian firms for a period of six years from 2005 to 2010. Dividend yield is taken as output variable and percentage share of important shareholder groups are taken as input variables to build Multilayer Perceptron (M.L.P.) using Neural Networks. The most influencing category of shareholder groups are selected by sensitivity analysis. We found that the involvement of individual investors, non promoters & corporate bodies in the firms’ capital structure negatively impacts the dividend yields. However, insurance companies banks and financial institutions ownership incites to increase in dividend yield. Furthermore the results also show that foreign institutional investor doesn’t seem to impact the dividend yields significantly for our study.

Keywords: Ownership Structure, Dividend Yield, Corporate Governance, Multi layer Perceptron, Neural Networks, Sensitivity analysis

Suggested Citation

Soni, Tarun Kumar, Impact of Ownership Structure on Dividend Yields: A Neural Network Approach (May 14, 2011). Available at SSRN: https://ssrn.com/abstract=1841629 or http://dx.doi.org/10.2139/ssrn.1841629

Tarun Kumar Soni (Contact Author)

Fore School of Management ( email )

New Delhi
India

NITI Aayog ( email )

NITI Aayog
New Delhi, 100018
India

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