تلخیص
For analysis of managerial entrenchment hypothesis, insider’s ownership (MSO) is divided into three parts, i.e., MSO less than 25%, between 25% and 50% and above 50%. For data analysis Random effect model and Tobit model are used. Many studies have shown the linear relationship among managerial ownership and firm’s performance but a very few studies documented a non linear relationship in literature (Farinha, 2002; Chen et al., 2005). The study presented a non linear relationship between insiders’ ownership and dividend policy, i.e. at low level (MSO< 25%) a negative relationship exists which proves the agency theory hypothesis, whereas above this level (MSO>25%) a significant positive relationship is documented which is backed by the managerial entrenchment hypothesis, as at high level of MSO “resource extraction” and above 50% level “expropriation of minority rights” exist. Group affiliation (ASSO) is also included to see the impact on dividend policy and results reveal a significant negative relation between group affiliation and dividend policy.
Muhammad Anjum Fareed, Arshad Hassan. (2017) IMPACT OF MANAGERIAL ENTRENCHMENT AND GROUP AFFILIATION ON DIVIDEND POLICY IN EMERGING ECONOMY OF PAKISTAN EMPIRICAL EVIDENCE FROM KSE LISTED NON-FINANCIAL FIRMS, Jinnah Business Review, Volume 5, Issue 1.
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