Investigating the determinants of dividend policy in emerging markets using a combination of exploratory variables

Dadang Prasetyo Jatmiko,Viktor Manahov,Nnamdi Obiosa

doi:10.21511/imfi.13(2).2016.01

Dadang Prasetyo Jatmiko, Viktor Manahov + Show 1 more

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https://doi.org/10.21511/imfi.13(2).2016.01

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Abstract

s. The authors analyze the factors causing dividend policy by utilizing agency cost theory of dividend and transaction cost of dividend by using blue chips companies stock listed in the Indonesian Stock Exchange (IDX) from 2004-2013. They also examine the transaction costs of bid-offer spread and commission as the proxies with agency cost factors of insider ownership and shareholder dispersion. The authors observe that the independent variables affected the dividend policy simultaneously. In addition, they find that the bid-offer spread as a new proxy also had significant effects on the dividend policy

Highlights

The authors analyze the factors causing dividend policy by utilizing agency cost theory of dividend and transaction cost of dividend by using blue chips companies stock listed in the Indonesian Stock Exchange (IDX) from 2004-2013
Since dividend policy is viewed as a standout amongst the most complex issues in money-related financial aspects, this study examines how profit approach is executed in developing business sector
The data consisted of the Liquid Companies 45 (LQ45) as blue chip shares listed on the Indonesian Stock Exchange (IDX)

Summary

Introduction

The authors analyze the factors causing dividend policy by utilizing agency cost theory of dividend and transaction cost of dividend by using blue chips companies stock listed in the Indonesian Stock Exchange (IDX) from 2004-2013 They examine the transaction costs of bid-offer spread and commission as the proxies with agency cost factors of insider ownership and shareholder dispersion. Zainul Kisman (2013) tested the impact of profit, agency costs, investment opportunity, solvency, size, and liquidity on the probability of the company on paying their dividend Their result demonstrates that benefit, office expenses and liquidity have no noteworthy effect since backers by and large are little organizations with lower gainfulness and lower speculation opportunity. Duha Al Kuwari reports that the government ownership as a part of agency theory had significant influence on the dividend policy

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