Dividend Payouts and Shareholder Structure: Evidence from the Warsaw Stock Exchange

Using 3,297 observations covering 516 nonfinancial companies listed in 2005–2014 on the Warsaw Stock Exchange, we apply a principal–principal agency framework to construct a panel model on the magnitude of ownership concentration and collusion among blockholders to reduce dividend payouts. We show that ownership concentration by the largest and second-largest shareholders, as well as by the state, lowers dividend payouts, while stakes held by industrial concerns and financial institutions constrain the expropriation of minority shareholders. Our results demonstrate important implications for investors and others concerned with increasing transparency and attracting new capital.