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JEL Classification:

G15, G32, G34, G38


This study investigates empirically the implications which the changing ownership structure and control transfers in the Japanese corporate market may have for the dividend policy of listed firms. The results show that firms with more concentrated ownership may distribute fewer dividends, as ownership concentration reduces distribution pressure from the capital market. Furthermore, we show that institutional shareholding, both financial and non-financial, enables corporations to pay lesser dividends and also, that the unwinding of cross-shareholdings allows for efficiency gain and provides impetus to pay higher dividends. The recent pattern of increasing individual shareholding, both, of domestic and foreign private individuals, is consistently associated with a higher dividend payment. Moreover, managerial ownership has negative effects on dividends payouts and is not associated with the earnings of firms. The results suggest that government ownership does not have any significant impact on the payment of dividends.


Corporate Governance, Change in Control, Dividends behaviour, Financial Reform