Abstract
Although there is a vast literature that has investigated the dividend policies of firms from developed countries, relatively little research has been published exploring the dividend policies of firms from emerging countries. The literature regarding establishing the relationship between dividend policy and the attributes of non-financial companies listed on Romanian stock market, to the best of our knowledge, remains inexistent. The aim of this study is to identify the main factors influencing dividend policy for the non-financial companies listed on the Bucharest Stock Exchange for a period of ten years from 2007 to 2016. In order to achieve this aim, panel data were collected from the listed companies’ reports and financial statements. The study reveals that dividend policy is positively related to corporate profitability and liquidity and negatively associated with leverage, size, growth, and the state of the economy.
Highlights
The dividend policy is one of the most researched topics in corporate finance over the past decades
Dividend policy represents the set of guidelines a firm uses to dispose how much of its financial resources will payout to its shareholders, when it is not required by law, as mentioned by K
We investigate the relationship between dividend policy and the attributes of non-financial companies listed on the Bucharest Stock Exchange Market for a period of ten years from 2007 to 2016
Summary
The dividend policy is one of the most researched topics in corporate finance over the past decades. Dividend policy represents the set of guidelines a firm uses to dispose how much of its financial resources will payout to its shareholders, when it is not required by law, as mentioned by K. Modigliani [2], pioneers in this field, demonstrate that dividend payments have no effect on company value and the payout ratios should not matter under perfect capital market assumptions. In the real world where markets that are far from being perfect, the irrelevance theory proposed by M. Modigliani [2] is no more an acceptable answer
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