Determinants Of Dividend Policy Research Articles

The Determinants of Dividend Policy: A Comparison between Firms Listed on the Italian Stock Exchange and on the Warsaw Stock Exchange (2001–2014)

Several theories have been documented on the relevance and irrelevance of dividend policy. Many researchers continue to come up with different findings on the relevance ofdividend policy to the value of firms. In this paper, after an analysis of the different dividend pay-outs offered by Italian and Polish firms, we aim to understand the main factors thatdetermine the dividend policies of listed companies in Italy and Poland. In order to analyse this policy, we extract data from a wide sample of firms selected from the equity markets of the Italian and Polish stock exchanges. We use descriptive statistics and statistical regressions. The analysis is developed using the Statistical Package for Social Sciences (SPSS).
 The study reaches findings that are of great relevance to scholars and investors investigating dividend issues. The paper finds that there are many differences between Italian andPolish dividend policies; in particular, the dividend pay-out is mostly determined by the dividend yield and liquidity in Polish firms, while it is heavily influenced by profitabilityand leverage in Italian firms.

TRUST VALUE OF A DIVIDEND : AN EVIDENCE FROM INDONESIA

Even though there are many issues surrounding dividend policy, dividend remains one of the main goals for investors to achieve. The aim of this study is to find out determinants of dividend policy in Indonesia. Most of the samples in observed period have varieties of dividend policies. Data for this study was collected from 258 business entities in the period between 2009 and 2012. For hypotheses testing, a binary logistic regression and factor analysis were used. The result from binary logistic regression showed that share price, earnings per share and current ratio are significant factors for dividend policy, while debt to equity ratio and corporate tax are insignificant. The insignificance of debt and tax was probably due to current ratio affected by accounting adjustments. Even though debt and tax are insignificant, they could not be ignored. Using factor analysis, it is confirmed that, most companies in this study have a similar objective through dividend policy, which is to maximize their share value in the stock market by considering profitability and liquidity on cash availability and also debt and tax. Dividends as a form of “trust value” offered by companies to their shareholders stimulate the trust of investors or shareholders and resulting the increase of share price.

Foreign directors, indigenous directors and dividend payout structure in Nigerian deposit money banks

This paper aims to examine the influence foreign and indigenous directors have on determining firms’ dividend payout structure. The population for this study is the fifteen deposit money banks listed on the Nigerian Stock Exchange. Using a random sampling technique, a sample of 14 deposit money banks for the 2010 to 2017 period was taken. The total observations used for the work was 112. The study adopted a panel data methodology, which was estimated with a random-effect model. It was observed that a significant relationship exists between foreign directors and the dependent variable (dividend payout structure). The dividend payout structure by dividend per share of sampled firms was measured. This study will improve analysts and investors’ understanding of dividend policy by giving them insights in identifying the main determinants of dividend policy. For policy makers, this study reinforces the fact that good corporate governance is important to develop financial markets and improve the firm value.

Determinants of Dividend Policy with Reference to Select Indian Companies: A Panel Data Regression Analysis

Determinants of Dividend Policy with Reference to Select Indian Companies: A Panel Data Regression Analysis

TRUST VALUE OF A DIVIDEND : AN EVIDENCE FROM INDONESIA

Even though there are many issues surrounding dividend policy, dividend remains one of the main goals for investors to achieve. The aim of this study is to find out determinants of dividend policy in Indonesia. Most of the samples in observed period have varieties of dividend policies. Data for this study was collected from 258 business entities in the period between 2009 and 2012. For hypotheses testing, a binary logistic regression and factor analysis were used. The result from binary logistic regression showed that share price, earnings per share and current ratio are significant factors for dividend policy, while debt to equity ratio and corporate tax are insignificant. The insignificance of debt and tax was probably due to current ratio affected by accounting adjustments. Even though debt and tax are insignificant, they could not be ignored. Using factor analysis, it is confirmed that, most companies in this study have a similar objective through dividend policy, which is to maximize their share value in the stock market by considering profitability and liquidity on cash availability and also debt and tax. Dividends as a form of “trust value” offered by companies to their shareholders stimulate the trust of investors or shareholders and resulting the increase of share price. Keywords : dividend policy, share price, corporate tax, current ratio, earnings per share, debt equity ratio

Impact of Dividend Announcements of Banks on Stock Returns and the Determinants of Dividend Policy

Impact of Dividend Announcements of Banks on Stock Returns and the Determinants of Dividend Policy

DETERMINANTS OF DIVIDEND POLICY AMONG NIGERIAN LISTED CONSUMER GOODS MANUFACTURING COMPANIES

The study seeks to identify determinants of dividend policy among listed consumer goods manufacturing companies in Nigeria. Secondary (cross sectional and time series) data were collected from seven (7) consumer goods manufacturing companies randomly selected from twenty-seven (27) listedcompanies on the Nigeria Stock Exchange (NSE) as at 2016. Thecollected data were analyzed using Ordinary Least Square Methods. The resultsof the study show that there is a negative significant relation between profitability and dividend policy (b3= -0.43; t= -2.88 and p<0.05). Also, a positive significant relationship exists between liquidity and dividend (b4 =0.17; t=1.04 and p<0.05).However, there is no significant relationship between firm size and dividend policy (b1= 0.017; t= 0.10.7 and p> 0.05) and finally a negative insignificant relationship exists between financing policy and dividend policy (b2= - 0.12; t= - 0.70 and p > 0.05). This implies that business size and financing policyare not determinants ofdividend policy in Nigerian listed consumer manufacturing companies. The study recommends, among other things, that operators in the manufacturing sector facing dividend policy decision should focus more on improving profitability and liquidity.

An analytical study on determinants of dividend policy with special reference to selected BSE sensex companies

An analytical study on determinants of dividend policy with special reference to selected BSE sensex companies - JMRA- Print ISSN No: - 2394-2762 Online ISSN No:- 2394-2770 Article DOI No:- 10.18231/j.jmra.2019.007, Journal of Management Research and Analysis-J Manag Res Anal

The Determinants of Dividend Policy and Their Implications for Stock Prices on Manufacturing Companies Listed on the Indonesia Stock Exchange

.

Determinants of dividend policy: evidence from an emerging and developing market

PurposeThe purpose of this paper is to identify the determinants of dividend policy in an emerging and developing market.Design/methodology/approachThe study employs a quantitative approach using 191 Sri Lankan firms and 1,337 firm-year observations as the sample. The authors apply a Binary Logistic Regression model to uncover the determinants of the propensity to pay dividends, and a Fixed Effect Panel Regression to investigate the determinants of dividend payout.FindingsThe authors identify past dividend decision, earnings, investment opportunities, profitability, free cash flow (FCF), corporate governance, state ownership, firm size and industry influence as the key determinants of propensity to pay dividends. In addition past dividends, investment opportunities, profitability and dividend premium are identified as the determinants of dividend payout. Moreover, there is a feedback between dividend yield and profitability in one lag and between dividend yield and dividend premium in two lags, as short-term relationships. Hence, past dividend decision or payout, profitability and investment opportunities are a common set of determinants with implications for both propensity to pay dividends and its payout. The findings support theories of dividends such as signaling, outcome, catering, life cycle, FCF and pecking order.Practical implicationsThe findings are important for investors, managers and future research. Investors should focus on the determinants identified by our study when making investment decisions whereas managers should practice the same when formulating appropriate dividend policies for their firms. Future research should rely on propensity to pay dividends and its payout simultaneously to promote a theoretical consensus on the dividend determinant puzzle.Originality/valueThis is the first study that investigates determinants of propensity to pay dividends and dividend payout along with short-term relationships in a single study.

Earnings response coefficient as a determinant of dividend policy: Testing free cash flow theory on non-financial dividend paying firms in the Pakistan Stock Exchange

This study tests Jensen’s free cash flow theory which states that managers overinvest retained earnings in negative NPV projects. A data set of 238 firms listed on the Pakistan Stock Exchange for the period 1999 to 2016 is used. The results of the panel regression model show a significant positive association of the earnings response coefficient and dividend payout ratio, which supports the free cash flow theory in listed Pakistani firms. Moreover, the imposition of the capital gains tax and the financial crisis has further strengthened the positive relationship between ERC and dividend payout ratio.

Trend of dividends disappearing and reappearing in Pakistani listed firms

The objective of this study was to explore the main factors of dividend policy determinants. For this purpose, a sample of 150 listed firms in PSX taken into account for the period of 2008-2018. A secondary data taken from SBP publication, Stock exchange collected for this study and variables used size, debt ratio, profitability, size, investment, Firm’s Maturity, Market Capitalization, Return on Equity (ROE), Growth in Sales and leverage was utilized using Panel regression techniques. Data of dividend shows most of the period dividend amount and dividend firms increased during the period of research 2008-18. The trend also shows that dividend pattern increase as base year data to end period study during both democratic governments. Study findings also show that three different aspects of the dividend payment propensity during 2008-2018. Results show that payment of dividend is declined mostly in the small and newly firms because they have less income generated from profit, younger firms, and firms as compared with highly investment pattern of firm, high debts, higher risk in their business and high tax rates on dividend. The Study also finds a significant and positive association with propensity to pay dividend of catering theory and support the catering theory.

Determinants of Dividend Policy by Information Technology (IT) Firms in the United States

This paper examines the determinants of dividend payout policy of seventy publicly traded information technology (IT) firms in the United States in 2017. More important, the standard dividend payout ratio is adjusted to include depreciation because IT firms have higher depreciation than the services sector. Thus, this higher depreciation rates may have an impact on dividend payouts by IT firms. To find out the determinants of dividend payout policy, general linear models (GLM) were estimated using for standard dividend payout and the adjusted dividend payout as the dependent variables. In the standard dividend payout regression, corporate tax and the market to book ratio have a positive relationship with the dividend payout. Operating cash flow, corporate profit, debt to equity ratio, size and sales has a negative relationship with dividend payout. Finally, the regression for the adjusted standard dividend payout showed the corporate tax, operating cash flows, profit and the market to book ratio have a positive relationship with the adjusted dividend payout. Debt to equity ratio, size, and sales has a negative relationship with adjusted dividend payout.

Factors Influencing Dividend Policy in Bangladesh: Survey Evidence from Listed Manufacturing Companies in Dhaka Stock Exchange

A firm considers various factors when approaching a dividend policy decision. To analyze the determinants of dividend policy in the context of Bangladesh, questionnaire survey has been done from financial decision makers of sample companies. The nonparametric test and factor analysis is used for interpreting results. The research finding exhibits that in the first stage, the economic related factor, legal constraint factor, capital market related factor, residual policy factor, capital source factor and clientele factors are considered in dividend decision making. Then in the second stage, the companies follow the preceding years’ pattern of dividend payment. In the next stage, dividend decision is made mainly on the level of earnings and liquidity. The decision maker, investors and other stakeholders should follow these findings.

The Impact of Ownership on the Structures Based on Division Between Policies and Companies

The article reflects the features of dividend payments in large domestic companies. This implies the need to use econometric models to measure the quantitative and qualitative economic interrelationships of dividend payments and their growth factors. The result of the study is a methodical approach to assessing the growth factors of dividend payments based on linear multi-factor regression models. The authors propose the construction of a linear multi-factor regression in the Gretl software environment in order to identify the relationship between dividend payments and growth factors based on specific economic data. The study confirmed the hypothesis about the problem of agency conflict and payment of lower dividends in the conditions of concentration of shares in the hands of the majority owner. The empirical estimates of the parameters of the regression models presented in the article argued the hypothesis that public companies, which have a state as a majority shareholder send a smaller share of net profit to pay dividends than private companies, and an increase in borrowed funds in the company’s capital structure leads to a decrease in dividend payments. However, the hypothesis of a direct relationship between the size of the company and the size of dividend payments was rejected. This can be explained by the fact that the sample includes the largest Russian companies with a majority owner. In the future, researchers can perform more detailed measurements of the determinants of dividend policy, taking into account branch-wise and sectoral features of the economy.

Empirical evidence on the determinants of dividend pay-outs in the auto components sector in India

Determinants of dividend policy have been a topic of debate in the academic literature for several decades, but the studies have not been able to give a concluding result on the topic. Existing literature reveals that one of the most challenging decisions, dividend payout, is affected by multiple determinants thereby impacting the value of stock, among which proficatibility, capital structure and level of cash flows are identified to be significant factors. The aim of this study is to evaluate empirically the determinants of dividend payout among the companies in the Indian auto components sector which are listed in major Indian bourses. This paper constitutes a modest attempt to explore the relationship between dividend policy (dividend pay-out ratio) of the companies and the variables representing profitability, capital structure, investments, liquidity and cash flows. The other salient feature of the study is that it examines casual relationship of financial performance, operational efficiencies and investment strategies on decision of paying the dividend. ANOVA, correlation analysis and regression analysis have been used to explore the relationship between the identified variables. The study finds that the dividend policy of the companies in the Indian auto components sector is largely influenced by the operating profit, cash from operations, proportion of cash from operations used for financing the investment activities and the proportion of equity in the capital structure of the companies. The study addresses the Indian auto components sector, which is not researched much, and suggests rejuvenation in dividend policy after accounting a derived variable of cash flow to capital expenditure, as identified relevant to the group of auto manufacturers selected for the study.

Determinants of dividend payout of construction companies: a panel data analysis

PurposeThis paper aims to examine the determinants of the dividend policy of the construction companies in India.Design/methodology/approachData from 2011 to 2016 (six years) of 45 listed construction companies in India are collected, and a strong balanced panel is created. Dividend per share is dependent variable, and profitability, unstable earnings, institutional holding, cash flow, tangibility, liquidity, growth opportunities, age of the firm, life cycle, leverage, size of firm and taxation are explanatory variables. The panel is tested for stationarity and finally fixed and random-effect panel regression model with robust estimation option is performed.FindingsThe random effect model is found fit with an R2 of 62 per cent, and profitability, life cycle and size of the firm show a significant positive effect on dividend payment. Cash flow shows a negative significant relationship, indicating the presence of agency problem. Rest of the variables indicated an insignificant relationship.Research limitations/implicationsThe study is carried out on a small sample of 45 companies with data of only six years. Further, there may be behavioral and psychological factors that drive the decision to declare dividend. Those factors have not been considered in present study. Despite considerable efforts, the author could not find more studies specific to the construction sector. Hence, the variables identified in the present study are more generic, even though a few sector-specific studies have been included.Originality/valueThe dividend policy determinants for the construction sector in India are investigated, and a comprehensive model based on 12 explanatory variables is tested to find the drivers of dividend payout in Indian construction companies. From the investor’s point of view, the sector has immense potential in terms of dividend as well as capital appreciation. Therefore, the study can be useful to the investors to understand the drivers of dividend payout in the construction sector. It can also be crucial for companies to create an appropriate dividend policy so as to attract and retain investors. The study contributes significantly to the existing body of knowledge by recommending the salient drivers of dividend payout in the construction sector based on a comprehensive dataset and using robust methodology.

Dividend policy determinants of Sri Lankan firms: a triangulation approach

PurposeThe purpose of this paper is to identify the dividend policy determinants of Sri Lankan firms and why they pay dividends.Design/methodology/approachThe study uses several quantitative approaches to investigate dividend determinants using market (secondary) data of 190 Sri Lankan firms and 1,330 firm-year observations. Dividend determinants are also identified using survey (primary) data from 141 of the 190 firms. Triangulation is then used to facilitate validation of the data through cross-verification from two data sources.FindingsAnalysis of the market data reveals that firm size, industry impact, corporate governance, free cash flow, earnings, past dividends, profitability, investment opportunities, net working capital, concentrated ownership structure and investor preference represent the most important dividend determinants. Survey data confirm these findings. The evidence supports the pecking order, signaling, free cash flow, catering and outcome theories using both secondary and primary data and the bird-in-the-hand theory using survey data.Research limitations/implicationsThe findings are useful not only for corporate decision makers in establishing an appropriate dividend policy but also for shareholders in making investment decisions. Because the current study is limited to Sri Lanka, future researchers should study the same phenomenon in other countries using the triangulation approach.Originality/valueThis study provides a hybrid approach to dividend policy research by using both primary and secondary data in a single study. It is the first dividend study in Sri Lanka to use a triangulation approach.

Determinants of Divided Policy:Study on Banking Sector of Bangladesh

A firm considers various factors when approaching a dividend policy decision. To analyze the determinants of dividend policy in the banking of Bangladesh, it has taken the data of various financial indicators of sample banks. The pooled data regression model is used for inferring the result. The result shows that the significant determinants are retained earnings to equity, size, lagged DPR. The decision maker, investors and other stakeholders should follow these findings.

Revisitando os determinantes da distribuição de dividendos: uma análise em empresas brasileiras

Objetivo: A presente pesquisa teve por objetivo investigar os determinantes da política de dividendos em companhias abertas brasileiras.
 Metodologia: Realizou-se uma pesquisa descritiva, com abordagem quantitativa, por meio de pesquisa documental. A população da pesquisa compreendeu as empresas de capital aberto ativas na BM&FBovespa em 2017, tendo como amostra 293 empresas entre os anos de 2010 e 2016, totalizando 1.746 observações.
 Resultados: Os resultados demonstraram que a rentabilidade (RENT), o tamanho da empresa (TAM) e a distribuição de dividendos no ano anterior (DIVANT) são os fatores que contribuem de forma positiva e significativa para a maior probabilidade das empresas em distribuir parte dos seus resultados em forma de dividendos, enquanto o endividamento (END) apresentou relação negativa e significativa.
 Contribuições do Estudo: Este estudo traz uma importante contribuição para a expansão da literatura de finanças, especialmente no que tange a identificação dos determinantes da política de dividendos em companhias aberta brasileiras na medida em que oferece resultados empíricos passíveis de comparação e confrontamento com os resultados contraditórios encontrados na literatura revisitada contribuindo, dessa forma, para com a atual agenda de produção científica acerca desta temática.