Corporate governance and dividend payout ratio in non-financial firms listed in Indonesian Stock Exchange

Dividend payout policy has proved to be a complicated issue in the financial management literature that leads to the issuance of different arguments and theories explaining the facts about dividend ratio. The prime objective of the current study is to explore the impact of corporate governance on dividend payout ratio. In order to investigate the linkage between corporate governance and dividend payout ratio, data of four fiscal years (2013-2016) was extracted from annual reports of Indonesian publicly listed companies. The study examines the impact of ownership structure and corporate governance mechanisms on dividend payout ratio using panel data regression model. The findings of the study indicate that board independence, board size, institutional ownership, size and earnings before interest and tax are positive; whereas the CEO duality, managerial ownership, ownership concentration and leverage are in negative relation with dividend payout ratio.