Investigating the Impact of Ownership Concentration on the Dividend Payouts of the Listed Companies on the Tehran Stock Exchange

The purpose of this article is to investigate the impact of ownership concentration on the dividend payout policy of the listed companies on the Tehran Stock Exchange. To reach this aim ownership concentration is estimated by، Herfindal-Hirshman index، in a way that equity ownership equal to or greater than 5 percentages is considered as a measure of ownership concentration. Furthermore، cash dividend scaled by lagged total assets، cash dividend to net income (dividend payout ratio)، cash dividend scaled by lagged sales and cash dividend scaled by lagged market capitalization (dividend yield ratio) are used as measures of dividend payouts. The data sample consists of 81 companies during a 7 years’ time-period from 2003 to 2009. The results of hypotheses testing using panel data regression indicate that there is a positive relationship between measures of dividend payout and Herfindal-Hirshman index even after controlling for potential confounding effects. However، the relationship between ownership concentration and cash dividend scaled by lagged total assets is not significant. In other words، the more the ownership concentration، the more is the dividend payouts. This finding is consistent with the monitoring hypothesis. The implication of this result is that the ownership concentration will be effective corporate governance