The Impacts of Hofstede’s Cultural Dimensions and Ownership Structure on Dividend Policy of Financial Sectors in Jordan

sara Rawash


Purpose - This study aims to explore the significant relationship of Hofstede’s Cultural Dimensions and Ownership Structure with Dividend policy in financial companies listed - (Insurance and Banking sectors) - at Amman stock exchange for the year of 2019.

Methodology - The study based on agency theory and Hofstede's cultural dimension theory to understand the nature of the theoretical relationship between these variables. The six Dimensions- (PDI: Power Distance Index; IDV: Individualism versus Collectivism; MAS: Masculinity versus Femininity; UAI: Uncertainty Avoidance Index; LOT: Long- Versus Short-Term Orientation; IND: Indulgence versus Restraint) are represented as proxies of Hofstede’s Cultural theory. On the other hand, Foreign Ownership; Concentrated Ownership and Institutional Ownership are represented as proxies of Ownership Structure. The Payout ratio is used as a proxy for the Dividend Policy. The questionnaire was distributed to target companies to measure cultural dimensions.

The study tested the validity and reliability of the questionnaire by using the Cronbach Alpha factor. The researchers have employed the SSPS program to process the data statistically and to test the hypotheses and models of study. Further, Linear Regressions Technique was used to predict the significant relationship among the variables

Findings - Results have shown that six Hofstede’s Cultural Dimensions and Ownership Structure have no significant relationship with Dividend policy.

Conclusion - The study contributes to the existing literature by filling out the gap in studies that have been carried out on the impact of Hofstede’s Cultural Dimensions and Ownership Structure on Dividend policy in Jordan. Furthermore, the study has practical implications such as directing the Jordanian companies to make an effective investment decision by recognizing the effect of Hofstede’s Cultural Dimensions and Ownership Structure on Dividend policy. Also, helping researchers, thereby serving as an input and a motivation for further research in the future.


Hofstede’s Cultural Dimensions; Ownership Structure; Dividend policy; Insurance, Banking Sector; Jordan.

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