Factors affecting dividend payment policy: Differences between consumer goods and consumer staples in Vietnam

Abstract

The factors affecting the dividend distribution policy of companies listed on the Ho Chi Minh Stock Exchange are investigated using the signal theory and agency cost theory (HOSE). To generate empirical evidence, the study collects data from publicly traded and dividend-paying consumer companies over a 12-year period (2009-2020). At the same time, in order to better understand the research problem, the study examines the variations in factors affecting the dividend payment policies of two kinds of consumer companies (consumer staples and consumer discretionary). The findings of the FGLS regression analysis demonstrate that the following factors always affect dividend payment policy, consumer services, and consumer goods companies: earnings per share, debt-to-equity ratio, form of cash, and stock dividend payment. Consumer staples and consumer discretionary corporations' dividend policies are influenced by distinct factors. Consumer products companies have a greater dividend payout ratio than that consumer service companies. The findings provide a scientific foundation for consumer service and consumer products companies to implement more appropriate dividend distribution policies and raise funds through the stock market.