ABSTRACT
This study aimed at examining the effect of dividend policy as an agency cost model with an ownership structure in Indonesian companies. The study was conducted to reveal the involvement of family and institutional ownership in dividend decision making in manufacturing companies listed on the Indonesia Stock Exchange (IDX). The hypothesis was tested by using Ordinary Least Square (OLS) analysis. Samples were sorted by simple random sampling based on Slovin’s calculations. The samples obtained were 59 manufacturing companies consisting of 16 companies in conventional stock and 43 companies in sharia stock in periods of 2016-2018. Dividend policy is highly important in corporate financial decisions. In several countries, concentrated ownership structures, such as family or individual ownership, institutional ownership, and foreign ownership, have low dividend payments. Thus, the presence of a concentrated ownership structure in Indonesia has the possibility to pay low dividends. Furthermore, sharia shares to develop quite rapidly in Indonesia. However, only a few studies investigated dividend policy in companies listed on the Islamic stock index. Also, no research on the comparison of dividend policy on sharia and conventional stocks had been conducted yet. Hence, this research can be a reference for further research.
