Level Of Dividend Payments Research Articles

Analyzing the Influence of Dividend Policy on Corporate Value: A Financial Perspective with Haier as a Case Study

The dividend policy plays a pivotal role in stabilizing stock prices and sustaining investor enthusiasm for listed companies. It not only significantly impacts the interests of management, investors, and creditors but also has long-term implications for the company's development. However, most studies on Chinese enterprises' dividend policies primarily rely on empirical research methods, with limited literature available on individual companies. The utilization of a case analysis methodology in this study has significantly enhanced the research cases related to China's dividend policies, thereby providing valuable insights for the advancement of analogous industries and the formulation of future dividend policies. In this study, Haier Smart Home Co., Ltd. (referred to as "Haier"), a publicly traded company on the Shanghai Stock Exchange, is selected as the case study subject in order to examine the impact of dividend policy on corporate value from a financial perspective. Through an analysis of Haier's dividend allocation data from 2008 to 2022 and an evaluation of various financial indicators during this period, we find that a stable dividend payment level can effectively sustain the enterprise value of the company. Therefore, it is recommended for listed companies to optimize their ownership structure and enhance corporate governance while strategically formulating dividend policies aligned with their financial performance and corporate strategy.

CFO co-option and dividend payments: the moderating role of CFO talent

Purpose This study aims to investigate the association between the co-option of the chief financial officer (CFO) and dividend payments, assessing whether the talent of the CFO affects this association. Design/methodology/approach The empirical analyses were based on hand-collected data for 922 firm-year observations from 157 European listed firms, during the period 2013–2019. Empirical models, based on a two-step estimation procedure, involved the use of instrumental variables and the generalised moment method. Findings The results show that CFO co-option is negatively associated with the level of dividend payments. It was also found that the degree of CFO talent moderates the negative association between CFO co-option and dividend payments. Research limitations/implications This investigation responds to the call for literature which examines how chief executive officer (CEO) – CFO relationships influence firms’ policies and outcomes. The study offers novel evidence for the individual-level characteristics of CFOs which are likely to reduce the effectiveness of CEO power and increase monitoring on corporate decisions on dividends. Practical implications The study sheds light on the effect of the interactions between CEOs and CFOs, which are important for investors’ expectations. In this regard, investors may be interested in the CFO profiles which may reduce CEO power over dividend policies. Originality/value Unlike previous research, which focused on CEOs, the authors are the first to shed light on the role of CFOs as key decision makers in influencing the dividend policies in modern corporations.

Venture Capital and Dividend Policy

In this paper, we empirically examine the impact of venture capital investment on the dividend policy of the invested companies using a sample of list companies from China’s ChiNext market during the period 2014 to 2019. Our empirical results show that different types of VC investments have different impacts on the dividend policies of the invested companies. To be specific, we found independent venture capital companies (IVCs) promote the company’s dividend payment and increase the level of dividend payments while corporate venture capital (CVC) inhibits the company’s dividend payment. The joint participation of multiple types of venture capital investment (syndication) also increases the company’s dividend distribution. Our main contributions are two-fold. First, we provide a comprehensive analysis in the field of VC and dividend policy; second, we differentiate VC from the perspective of investment objectives and examine its different impacts on the dividend policies of the invested companies.

Dividen, Struktur Kepemilikan dan Tindakan Perataan Laba

Investors' desire towards the company's profit target encourages management to take income smoothing actions making an appearance that profits are stable, but in fact, profits are not as high as stated. Income smoothing can be affected by a number of variables, including dividend payout amounts and the ownership structure of a company. In order to examine the impact of dividend payments and ownership structure on income smoothing activities in non-financial companies, this study was carried out. The sample in this study comprised of 53 non-financial companies chosen using purposive sampling from the population of non-financial companies listed on the Indonesia Stock Exchange (IDX) from 2019 to 2021. The level of dividend payment had an impact on the income smoothing, according to the results of the logistic regression analysis that was used to test the hypothesis. The more dividends the company pays out, the more likely management will employ earnings smoothing. Companies typically flatten earnings to meet the amounts of dividends to be given to shareholders so that companies can continue to pay dividends to investors. This study informs shareholders on the company's practices for adjusting earnings to accommodate for dividend payments, enabling them to make more prudent portfolio decisions going forward. Keywords: Income smoothing, dividend, ownership structure.

The impact of government grants on the level of corporate cash dividend payments Research

As a way to compensate for market failures, intervene in the market economy and support specific industries, government subsidies are important for improving the efficiency of fiscal expenditure, adjusting and optimising the economic structure and rationalising the distribution of national income. The level of cash dividend payment often reflects the operating conditions of enterprises, and the impact of government subsidies on the level of cash dividend payment of enterprises can reflect whether the allocation of government subsidies is reasonable. This project uses data from 4,610 non-financial listed enterprises in China A-shares from 2016 to 2020 to conduct an empirical study on the relationship between government subsidies and cash dividend payout levels, and to explore the impact of government subsidies separately by industry. The study found that: government subsidies have a general effect on the increase of cash dividend payment level of enterprises; the fundamental factor that government subsidies have different effects on the cash dividend payment level of different industries is the requirement of cash flow of enterprises; the new manufacturing industry, wholesale and retail industry, real estate industry and agriculture, forestry and fishery industry are significantly affected by government subsidies.

Impact of Venture Capital on the Dividend Policy of Listed Companies and Management Platform Design

This paper uses the data of Chinese A-share listed companies from 2003 to 2019 to study the impact of venture capital holdings on the dividend policy of listed companies. The research findings show that venture capital holdings increase the willingness to pay cash dividends and the payment level. This conclusion still stands after using the PSM matching method and other robustness methods, indicating that there is causality between venture capital holdings and the dividend policy of listed companies. Further research finds that the course of action for venture capital holdings to increase the willingness of listed companies to pay cash dividends and their dividend payment level is to increase the dividend payout ratio by alleviating the company’s agency level. Further research finds that different types of venture capital will also have an impact on the dividend policy. Foreign investment venture capital organizations are more favorable for increasing the willingness of listed companies to pay cash dividends and their dividend payment level. In addition, the impact of venture capital holdings on the dividend policy is more obvious in the central and western regions where economic development is relatively backward and is less obvious in the eastern regions. Based on J2EE, a venture capital information management platform is designed and developed. The research of this paper shows that venture capital shareholding plays an important role in promoting dividend payment of listed companies, and has enriched the research results of the value-added role of venture capital. At the same time, from the perspective of dividend policy, it has brought to light the corporate governance effectiveness of venture capital and has provided certain theoretical evidence for the assertion that capital can better serve the real economy.

DETERMINANTS OF DISCLOSURE OF SUSTAINABILITY REPORTS IN LQ 45 COMPANIES LISTED ON IDX 2014 - 2018

This study aims to determine and analyze net profit margin, debt ratio, and dividend policy on Sustainability Reporting disclosure. The research sample used was 13 companies with the period 2014-2018. The sampling technique used purposive sampling technique. The data used in this study is using secondary data. The method used is a multiple regression technique that tests the variables of the panel data using SPSS 25. The results of this study indicate that net profit margin has a significant positive effect on Sustainability Reporting disclosure. With the increase in NPM (net profit margin), it will increase investor confidence in the company, so that the company's demands for its efforts in environmental and social performance are also higher. Debt ratio has a significant positive effect on Sustainability Reporting disclosure. The increase in the debt ratio shows the company's high need for fresh funds, the high value of the debt ratio also reveals the company's dependence on debt which can create risks for the company's survival. Dividend policy has a significant positive effect on Sustainability Reporting disclosure. The higher the level of dividend payments of a company, the level of disclosure in the Sustainability Report is also high.

Factors affecting the company's capitalization

The article considers the essence of the company's market value, clarifies the concept of enterprise capitalization. The author analyses Russian and foreign studies devoted to the identification of quantitative factors that affect the market value of companies. In the analysis of domestic research, the author pays special attention to the oil and gas and electric power industries of the economy. The analysis of foreign studies includes companies from Italy, Indonesia and Jordan. The paper analysed the structure and dynamics of the Russian stock market, the influence of revenue, net profit, the level of dividend payments, return on assets, the ratio of borrowed and own funds, as well as the return on sales by the amount of the market value of electric power companies whose shares are traded on the Russian stock market. The study identifies the main quantitative factors affecting the capitalization of companies. The author determines the directions of further research.

Information Shock and Dividend Policy in Family-controlled Firms: Evidence from Korea

ABSTRACT This paper aims to investigate whether the International Financial Reporting Standards (IFRS) used as an exogenous information shock relates to a firm’s dividend policy as a result of the improved information environment in the emerging Korean market. More specifically, utilizing a large sample of KOSPI-listed firms over the period 2000–2018, we examine whether the propensity and the level of dividend payments around the Korean IFRS (K-IFRS) adoption have changed and further how the family involvement affects such association. Our results show that firms tend to decrease the propensity and the level of dividend payments after the mandatory K-IFRS adoption. Moreover, we find that family-controlled firms have a significantly positive association with dividend payouts after the K-IFRS adoption. Our evidence can be shared with other emerging markets, where prevailing family firms have the characteristics of concentrated ownership and strong control power in an immature market with weak legal protection for outside shareholders.

A model of sustainable growth (SGR): Cross-industry analysis

Subject. We investigate the balance of enterprise development in the aviation, trade, and metallurgical industry for 2007–2019. Objectives. The aim is to analyze the sustainability of enterprise development in the said industries, identify factors, having an adverse impact on the balanced development of companies, subject to industry specifics, and ways to achieve the sustainable development of these companies. Methods. The balanced growth model (SGR) and general scientific and statistical methods to analyze economic processes serve as the methodological basis of the study. Results. We analyzed the sustainability of 13 companies on the basis of the balanced growth model. The sample includes companies operating in the aviation, trade, and metallurgy industry. The paper reveals factors that have a negative impact on balanced development, subject to industry specifics, and shows directions of achieving sustainable development of enterprises included in the analysis. Conclusions. The growth of aviation companies is not sustainable, due to losses in certain periods and a high level of dividend payments. To achieve a balanced growth, it is necessary to optimize the price and dividend policy, and reduce costs. The main problems of trading companies stem from a decrease in the level of net profit and incurred losses. The major internal factors, adversely impacting upon sustainable development of metallurgical enterprises, are unreasonably low or high-risk financial leverage, and low profitability or loss-making activities. To neutralize the negative impact of identified problems, it is important to form an optimal capital structure and develop an effective cost management system.

МОДЕЛЮВАННЯ ОПТИМАЛЬНОЇ ДИВІДЕНДНОЇ ПОЛІТИКИ УКРАЇНСЬКИХ КОМПАНІЙ

Актуальність теми дослідження полягає в тому, що для досягнення основної мети діяльності суб’єкта господарювання — отримання прибутку, такий аспект як розроблення раціональних пропорцій розподілу прибутку і вироблення оптимальної дивідендної політики, є одним з основних складових забезпечення ефективності діяльності підприємства. Метою дослідження стала розробка методичного підходу до визначення оптимальної дивідендної політики підприємств на основі залежності оптимальної норми дивідендних виплат від структури капіталу підприємств в Україні. Методологічну основу дослідження становить метод багатофакторного регресійного аналізу. На основі цього методу України розроблено поліноміальну регресійну модель складних зв’язків між нормою дивідендних виплат і показниками ефективності діяльності підприємств. Вибір підприємств здійснений за такими критеріями: організаційно-правова форма акціонерного товариства; підприємства здійснюють виплату дивідендів. Період дослідження — 2000—2018 роки. Для перевірки сценаріїв реалізації політики дивідендних виплат розраховано показник еластичності чистого прибутку підприємств, які сформували статистичну базу дослідження, від рівня дивідендних виплат. Для визначення оптимального рівня дивідендних виплат, за якого максимізується позитивний ефект (E = max), побудовано систему функції для різної структури капіталу підприємств і на основі проведення експериментів з цією системою визначено оптимальний рівень дивідендних виплат. Для визначення оптимального типу дивідендної політики, виходячи із рівня дивідендних виплат, оціненого у відсотках від чистого прибутку компанії, використано метод шкалювання за законом Фібоначчі. Розраховано діапазон кількісних рівнів дивідендних виплат досліджуваних компаній, відповідно до якого визначено тип оптимальної політики щодо сформованої структури капіталу компанії. Такий підхід дозволяє визначити відповідний тип дивідендної політики з урахуванням фінансового стану компаній з метою максимізації її ринкової вартості. Утилізує суб’єктивізм у процесі оптимізації дивідендної політики компанії і забезпечує достовірність результатів оцінки оптимального рівня дивідендних виплат. Сприяє підвищенню ефективності чистого прибутку компаній і нарощування потенціалу максимізації їхньої ринкової вартості.

The impact of board of directors’ characteristics on dividend policy: Evidence from a developing country

The “dividend puzzle” has been an unresolved problem since the 1950s. The purpose of this paper is to investigate the nature and a level of the relationship between board characteristics dividend policy. The study used a positivistic approach and Spearman correlation metric, descriptive statistics, and binary regression models have been deployed as analytical tools. It is found that food and beverages sector had the highest percentage for dividend payout from 2015 to 2019. The highest percentage for women on boards was 13% in the land and property sector. The average board size for the selected companies was 8. The likelihood to pay dividends, women on boards, the board size, and CEO duality indicated a significant positive relationship. Panel regression results indicate that there is no significant relationship between board characteristics and the level of dividend payment for the selected sample. But in a sectorial analysis audit committee size has a significant negative relationship with the level of dividend payment in the manufacturing sector whereas board gender diversity has a significant positive relationship with the same in the food and beverage sector. In summary, dividend decision has been affected by several board characteristics, but such factors had no significant impact on the level of dividends declared in the market. The sectorial analysis revealed that several characteristics affected the level of dividends in two sectors

Dividend Policy and the COVID-19 Crisis

This paper examines dividend payment behavior of the S&P1500 firms during the COVID-19 crisis characterized by the stock market crash and a V-shaped stock price recovery propelled by technology stocks. We find that the great majority of firms either maintain or increase the level of dividend payment during the crisis period. Yet, the relationship between the dividend payout and bottom-line earnings available to common shareholders is significantly negative. This relationship holds even for dividend-increasing firms whose earnings streams should be relatively higher (or increasing) compared to other firms in the sample. We also find that forecast earnings of up to one year in the future are negatively associated with the current dividend level implying that the existing payout policies are unsustainable. Interestingly, we document similar patterns for stock repurchases.

Research on the Mechanism of Venture Capital on Cash Dividend of Listed Companies—An Empirical Analysis Based on the Perspective of Corporate Governance

In this paper, principal component analysis is used to weigh the level of corporate governance and an intermediary effect model is built based on the perspective of corporate governance. It is found that the cash dividend payment propensity and payment level of listed companies with venture capital shareholders are significantly higher than that of listed companies without venture capital holdings, and the higher the shareholding ratio of venture capital to listed companies, the higher the cash dividend payment level. The effect of venture investment on cash dividend is realized by improving corporate governance level. The higher the proportion of venture investment in listed companies, the more obvious the improvement of corporate governance is, thereby reducing the agency cost of the company, which is manifested in the improvement of cash dividend payment level of listed companies.

Determinants of Corporate Dividend Policy in Polish Companies Listed on WSE

Abstract The purpose of this paper is to identify the factors influencing the level of dividend payments in the companies listed on the Warsaw Stock Exchange in 1998-2017 as well as to provide empirical evidence for their significance, using a panel data approach. The object of research comprised the companies listed on WSE, as of February 01, 2019. The subject of the analysis are the dividends paid by the companies and the factors potentially influencing the decisions regarding profit distribution. The models estimated for the panel data, based on the theory, allowed selection of the best model, which is the random-effects model. Moreover, these models allowed identification of the factors determining the changes in the level of dividend per share. The best model was the random-effects model. This model allowed identification of the factors impacting the changes in the level of dividend per share, that is, the value of the company’s total assets and the history of the company’s operation on the stock exchange market. All structural parameters (except the intercept) were positive. It means that growth of each of these variables causes an increase in the dividend per share.

The Influence of Cash Flow, Leverage, and Market to Book Ratio on the Level of Dividend Payment; Study at Consumer Goods Companies Listed in Indonesia Stock Exchange (IDX) 2015-2017

The purpose of this study is to obtain the empirical evidence about the influence of cash flow, leverage, and market to book ratio to the level of dividend payments. The population used in this study is the consumer goods companies listed in Indonesia Stock Exchange from 2015 to 2017. The results show that Cash Flow, leverage, and market to book ratio simultaneously influence the level of dividend payment of the consumer goods companies listed in the IDX and while the market to book ratio is partially influence the level of dividend payments to the consumer goods companies listed in the IDX. There fore the bigger of the market to book ratio the bigger the dividend must be payed by the companies of the consumer goods listed in IDX. Keywords: cash flow, leverage, market to book ratio, dividends DOI : 10.7176/RJFA/10-2-09

Professionals inside the board room: accounting expertise of directors and dividend policy

ABSTRACTDirectors’ personal attributes have significant impacts on governance effectiveness. We study whether directors’ accounting expertise affects corporate financial policy and investigate dividend in specific. We construct a dataset of audit committee directors’ accounting expertise for Standard & Poor 500 firms from 2005 to 2012. We first verify directors’ monitoring roles by showing that firms with accounting expert sitting on their audit committees demonstrate stronger accounting conservatism. In our main tests, we find that these firms maintain lower dividend payment level, which are less sensitive to earnings volatility. This suggests directors’ advisory roles in financial policy. We further show that our accounting expertise cannot be subsumed by management ability. In additional test, we further examine the baseline results conditional on analyst forecast error. Our findings highlight the importance of directors’ professional expertise in fulfilling their governance roles.

Stock Market Liquidity and Firms' Dividend Policy on the Warsaw Stock Exchange

Studies on the effects of stock liquidity on corporate financial decisions have been made only recently. The first work in this field was a paper of Banerjee et al. (2005), in which they investigated the impact of stock market liquidity on firms’ dividend policy. On the developed markets the effect of liquidity on firms’ dividend payout is well documented and the findings are not ambiguous: the more liquid are shares on capital markets, the fewer companies are willing to pay dividends and they maintain a lower level of payments. Although most of studies made on emerging markets supports this results, there is still lack of comprehensive analysis made on the polish capital market. The goal of this paper is to investigate the relationship between stock liquidity and both firms’ propensity to pay dividends and the level of dividend payments. Research results presented here also support the effects of previous studies: firms with less liquid shares are more willing to pay dividends. The effect of stock liquidity on the payout level also exists but is less significant. The paper is a contribution to further research in this field using data on more companies and from a longer period.

Political uncertainty, dividend policy adjustments and market effects

By studying Chinese firms that issued A-shares in the Shanghai and Shenzhen markets from 2004 to 2010, we examine how political uncertainty, caused by a change of Party chief at the municipal level, affects firms’ cash dividend decisions. We find that political uncertainty leads to a more prudent cash dividend policy. First, non-dividend-payers are less likely to initiate dividends due to political uncertainty. Secondly, political uncertainty significantly reduces the level of dividend payments. Compared with privately-owned firms, state-owned firms are more likely to adopt prudent cash dividend policies. The prudent adjustments of cash dividend policies due to political uncertainty have significant positive market effects.

The Relationship between Dividend Payout Policy and Foreign Institutional Investment in India

This article tries to explore the link between dividend payout policy and foreign institutional investment (FII). Using panel data of 150 listed Indian companies for the period 2001–2010, this article tries to explore the impact of FII on dividend payout policy and vice versa. The outcomes indicate the FIIs, as a whole, increase the chance of paying cash-dividend, but the marginal impact is quite small in economic terms and also FIIs increase the probability of paying more dividend payouts. Our analysis has further shown that the foreign institutional investors are attracted towards cash-dividend paying firms. Thus, our study does not support the traditional agency cost problems but do support the clientele theory. Our results further reveal that our firm-level characteristics do support the free-cash flow theory and the pecking order theory firmly but the maturity theory partially. However, the financial recession, which has started since 2007, has shown its usual negative impact on the level of dividend payments.