Does ownership structure affect dividend decisions? Evidence from Indonesia's banking industry

This research aims at examining the effect of ownership structure on dividend decisions in the context of Indonesia's banking industry. The results of the study show that controlling ownerships have a negative effect on dividend payouts. Controlling ownerships in Indonesia's banking industry prefer to pay less dividends to the shareholders. Further, the nonmonotonic test also shows negative effects of controlling ownerships on the dividend payouts. The study divide ownership into three categories: family-owned bank, government-owned bank, and foreign-owned bank. Government-owned banks and foreign-owned banks have negative effects on the dividends. However, family ownership positively affects dividend payouts. Family-owned banks pay more dividends to the shareholders. The results show that family-owned banks align their interests with those of the shareholders.