Abstract:

While shareholder activism is most prevalent in United States, Asian region too is witnessing the rise in the activism count – driven prominently by the proliferation of global institutional investors stakes in Asian companies which support activist investors. However, since institutional investors all across the globe are much more dispersed and diversified than individual investors, hence, domestic institutional investors too could be as impactful as their foreign peers in steering targets’ corporate governance agenda towards the direction that they considered ideal. Yet, despite deemed to be highly capable to force corporate governance change, the influence of institutional investors on their investees’ corporate governance agenda may not be as cut and dry as it appears. Moved by this premise, this study proposes models for empirical investigations into the relationship between companies’ lagged dividend payout level and their current dividend payout level. The study further proposes that the institutional shareholding would weaken the relationship between companies lagged dividend payout level and their current ones.