Dividend policy and the bank-firm relationship: evidence from Tunisian context.

Abstract

The Tunisian economy has undergone several changes since independence, such as liberalisation and the opening of the external market. Since then, the financial market has developed gradually. These changes have positively affected banking services and the reforms of the International Monetary Fund (1986-1997) have significantly improved the Tunisian banking sector. This paper aims to study the dividend policy of Tunisian firms, focusing on the relationship between banks and firms, and its impact on the dividend policy (DP) of non-financial firms. Two econometric models have been used to explore the role of banks in Tunisian firms: partial adjustment model (PAM) and fully adjustment model (FAM). The results of both models suggest that the creditor bank positively affects the DP of non-financial firms in Tunisia. Only the results of PAM model have shown that banks play a dual role in nonfinancial Tunisian firms and negatively affect the payment of dividends.