Share Repurchases Versus Dividends: A Comparison Between Poland And South Africa

Abstract

The main aim of the study is to compare share repurchase and dividend payout trends of listed non-financial and non-resource companies in Poland and South Africa over the period 2005–2015. Although South Africa is a developing country with a dualistic economy, the country is characterized by a sophisticated stock exchange which is comparable to that of most advanced economies, while Poland was reclassified from emerging market to developed market status, effective as from 24 September 2018. Comparative analysis provides insights on the regulatory differences and the effect therefore on share repurchase and dividend behaviour, and whether these countries mirror the excessive payout behaviour observed in the United States of America (US). The study results show that in both countries dividends are the dominant form of payouts to shareholders. Moreover none of the examined countries mirrors the excessive payout behaviour observed in the US ­­– neither in Poland, nor in South Africa did share repurchases surpass dividends. Regulatory differences between Poland and South Africa, however, affected the observed trends in payout behaviour between the two countries.