The Impact of Government Ownership on Dividend Policy:Case in Viet Nam

In this paper, we examine the impact of government ownership on dividend policy in case of Viet Nam in period 2010～2016. This paper uses a sample of 374 listed firms in Ho Chi Minh Stock Exchange (HOSE) and Ha Noi Stock Exchange (HNX) excluding the financial sector. This sample takes 53.51% of total listed firms in Viet Nam. The findings highly support the substitute hypothesis of La Porta el al. (2000) which indicated that in weak corporate governance countries, the managers try to pay out high dividend as a substitute for investor’s legal protection. We find strong and robust evidence showing that government ownership has a positive impact on dividend payout in Viet Nam. Additionally, consistent with previous research, leverage and retained earnings ratio negatively correlate with payout, where as market to book ratio, profitability, cash and size of firms have positive relation with dividend payout.