The Relation of Market Concentration and Power with Dividend Policy of Listed Companies in Tehran Stoch Exchange

Dividend policy is one of the most important firms’ fiscal policies that is considered by researchers due to affecting financing and investing policy. The type of dividend policy in one side is related to firms’ performance and financial caractiristics and on the other side to capital market regulations and corporate governance, in which firms’ ability to affect industry market is an important factor. So present research approaches to investigate relationship between market concentration and power with firms’ dividend policy in Tehran Stock Exchange over the period of 2010 to 2015. In the study, Lerner adjusted index, as a measure of market power and Herfindahl-Hirschman index, for measuring of market concentration are used. Analysis of the panel data structure and testing of logistic and multiple regression models have been carried out. The findings indicate significant positive relationship between market concentration and power with payout decisions. On the other hand, the relationship between market power and concentration with dividend payout ratio are statisticaly significant as well. That means increasing in market power and concentration lead to increase firms’ tendency of dividend policy.