Proceedings of the Brawijaya International Conference on Business, Administration, Taxation, and Tourism (BICBATT 2022)

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Ownership Structure, Capital Structure, and Dividend Policy

The Moderating Role of Free Cash Flow in Indonesia

Authors
Nur Imamah1, *, Saparila Worokinasih1, Tsui-Jung Lin2, Fernanda Dewi1, Gafar M. Ragap Elganzory3
1Department of Business Administration, Universitas Brawijaya, Malang, Indonesia
2Department of Banking and Finance, Chinese Culture University, Taipei, Taiwan
3Department of Business Administration, Gulf of Sidra University, Libya, South Africa
*Corresponding author. Email: nurima_fia@ub.ac.id
Corresponding Author
Nur Imamah
Available Online 22 September 2023.
DOI
10.2991/978-94-6463-240-8_11How to use a DOI?
Keywords
Ownership Structure; Capital Structure; Dividend Policy; Free Cash Flow
Abstract

Dividend policy is an important topic that is always interesting to research. The dividend policy determines the profit distributed to shareholders and the profit reinvested in the company. However, managers have different interests and seek to achieve personal gain and harm shareholders. This study examines the effect of ownership structure, capital structure, and free cash flow on dividend policy. The sample of this study is the companies listed on the Indonesia Stock Exchange from 2017 to 2021 using purposive sampling. The variables of this study consist of dividend payout ratio as the dependent variable and managerial ownership and debt to total asset ratio as the independent variables. Then, the interest variable in this study is the free cash flow ratio which acts as a moderating variable. The study uses panel data analysis from the common effects model of multiple linear regression. The empirical results found that managerial ownership positively and significantly affects the dividend payout ratio. The debt-to-total asset ratio negatively and significantly affects the dividend payout ratio. Surprisingly, the findings of the free cash flow ratio cannot be proven on the influence of both managerial ownership and debt to asset ratio. This study has implication for investors’ interest to invest in getting the dividends they expect from companies in Indonesia. The main value of this paper is the analysis of the effect of ownership structure, capital structure, and free cash flow on dividend policy, and free cash flow is a moderating variable from the Indonesian perspective.

Copyright
© 2024 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the Brawijaya International Conference on Business, Administration, Taxation, and Tourism (BICBATT 2022)
Series
Advances in Economics, Business and Management Research
Publication Date
22 September 2023
ISBN
978-94-6463-240-8
ISSN
2352-5428
DOI
10.2991/978-94-6463-240-8_11How to use a DOI?
Copyright
© 2024 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Nur Imamah
AU  - Saparila Worokinasih
AU  - Tsui-Jung Lin
AU  - Fernanda Dewi
AU  - Gafar M. Ragap Elganzory
PY  - 2023
DA  - 2023/09/22
TI  - Ownership Structure, Capital Structure, and Dividend Policy
BT  - Proceedings of the Brawijaya International Conference on Business, Administration, Taxation, and Tourism (BICBATT 2022)
PB  - Atlantis Press
SP  - 85
EP  - 94
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-240-8_11
DO  - 10.2991/978-94-6463-240-8_11
ID  - Imamah2023
ER  -