A dividend function for Greek manufacturing

Abstract

PurposeIn this article an attempt is made to measure the amount of dividends allocated each year to shareholders in the large scale Greek manufacturing (establishments employing more than ten people).Design/methodology/approachThe construction of a dividend function is made and the factors affecting dividend distribution in Greece are discussed.FindingsWhile the original model provides for the effect of dividend taxation parameters – in addition to income considerations – in payout decisions, it is finally proved that a company's income is the sole main determinant of dividend distribution in Greek manufacturing.Originality/valueThe equilibrium income elasticity is found very close to one which indicates that dividends in Greece are proportional to profits.