Dividend Payments Research Articles

The Effects of Dividend Policy on the Growth of Micro Financial Institutions in Bamenda

This paper titled the effects of dividend policy on the growth of micro financial institutions in Bamenda has the objectives to look at the effects of dividend rate on the growth of MFIs Bamenda and the effect of decision of dividend payment on the growth of MFIs in Bamenda. The paper employed the use of secondary data which was accumulated through from 49 Micro Financial Institutions in Bamenda which was the population, the ordinarily least squares model was used. Descriptive statistics was utilized and analysis was done using the SPSS25 program application. Moreover, interpretations were made based on the results gotten. The study demonstrated that dividend rate and decision of dividend payment had a positive and significant effect on the growth of Micro Financial Institutions in Bamenda, the results also revealed that Access to capital markets has a negative insignificant effect on assets, therefore policies that enhance participation in capital markets will lead to a decrease in assets. The paper suggests that MFIs should set appropriate dividend rates so as to continue growing their institutions. MFIs that don't pay dividend but aim to grow ought to begin paying dividend to members.

Determinants of UK companies’ dividend policy

This study examines the major factors influencing UK companies listed on the Financial Times Stock Exchange (FTSE) 100 stock market's dividend policy (as determined by the dividend payout ratio) over 32 years, from 1990 to 2022. The dividend premium and free cash flow components make up the catering dividend. The outcomes of a wide range of panel data analysis regressions, such as Generalized Method of Moments (GMM) and Two-Stage Least Squares (2SLS) regressions, clearly show that the catering dividend significantly impacts UK firms' dividend policy. On the other hand, the dividend policy benefits from the dividend premium, which increases it by 12% to 17% on average. Free cash flow, on the other hand, has a negligible negative impact on the dividend policy by just 5%. It is crucial to mention that this outcome varies depending on the models and regression techniques used. Furthermore, this study emphasizes how important it is for a firm's size and profitability to play a key role in determining how it will implement its dividend policy. Financial leverage also becomes important since a company's dividend payment ratio decreases when it relies more heavily on debt in its capital structure. By using GMM and 2SLS regressions, this study carefully tackles the endogeneity issue, and the results hold up even when the endogeneity effect is reduced. Ultimately, this study emphasizes how important dividend catering components are in guiding UK companies' dividend policies, arguing that CEOs and legislators should pay more attention to this.

Dividend-tax avoidance trade and its impact on the stock market

This study uncovers a unique dividend-tax avoidance trade that allows high-bracket investors to circumvent taxation on dividend income. As the first comprehensive analysis, we examine diverse investor types, implementation techniques, and the implications for stock prices. Utilizing unique account-level trading data from the Taiwan Stock Exchange, we present empirical evidence highlighting the activities of traders in both the stock and warrant markets. These traders simultaneously sell stocks, buy call warrants before the ex-dividend day, and close their positions afterward. Our findings reveal that this behavior frequently occurs in stocks with issued warrants and low imputation tax-credit ratios. Additionally, we observe substantial disparities in trading behaviors among diverse investor types, including foreign institutions, investment trusts, dealers, domestic institutions, and retail investors. The empirical results indicate that dividend-tax-avoidance trades negatively affect stock prices before dividend payments.

Linearisation techniques and the dual algorithm for a class of mixed singular/continuous control problems in reinsurance. Part II: Numerical aspects

This paper is intended as a companion to [12] and focuses on the numerical implementations of the method in the context of insurance problems with mixed controls: reinsurance acting as continuous control, and capital injection and dividend payment acting as singular ones. The aim is twofold. On the one hand, we provide a comparison of the output of our method in terms of the optimal value against two benchmarks. The first benchmark is provided by [4] in the no-reinsurance setting and when the claims are exponentially distributed. The second benchmark refers to [8] where capital injections are not permitted, but different claim distributions can be employed. On the other hand, we illustrate the improvement of the models in [8] when capital injection is allowed. We also look into the effect of reinsurance in the model [4]. Several cases for the equity cost parameter are discussed as are the boundary (or limit) situations.

Pricing Indefinitely Lived Assets: Experimental Evidence

We study indefinitely lived assets in experimental markets and find that the traded prices of these assets are on average about 40% of the risk-neutral fundamental value. Neither uncertainty about the value of total dividend payments nor horizon uncertainty about the duration of trade can account for this low traded price. An Epstein-Zin recursive preference specification that models the dynamic realization of dividend payments, combined with either probability weighting or subjects’ heterogeneous risk attitudes, can rationalize the low traded prices observed in our indefinitely lived asset market. This paper was accepted by Yan Chen, behavioral economics and decision analysis. Funding: This work was supported by Concordia University and the Bank of Canada. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2021.03059 .

The story of dividend payment and corporate cash flow in Ghana

AbstractThe thorny issue and contradictory conclusions on dividend payments and firm value are not ending any time soon. The existence of a divergence of findings in the literature suggests the need for further empirical studies on this subject matter. Therefore, this study focuses on how a firm's cash flow influences dividend payments in Ghana. Using data from 2015 to 2020, pooled ordinary least squares and random effects estimation, this study provides evidence of dividend payments in Ghana. The results show that dividend payments are influenced by a firm's net cash flow from operations, free cash flow to equity, firm size, and age. The relevant macroeconomic variables for dividend payments are inflation and gross domestic product growth. Another finding is that the more nonfinancial firms take on the characteristics of financial firms, the less dividends they pay. Managers of listed firms in Ghana should grow the size of their firms; however, this should be done in a manner not to expropriate value to managers as predicted in the Jensen agency problem associated with free cash flow.

Revisiting the Effect of Dividend Policy on Firm Performance and Value: Empirical Evidence from the Korean Market

This study investigates the relationship between dividend policy, firm performance, and value within the Korean market, taking into account the unique context of Chaebol ownership structures. Utilizing a robust dataset of 5478 observations from the Korean Composite Stock Price Index, our empirical analysis employs advanced regression models, revealing distinctive effects of various dividend policy measures through the lenses of interest alignment and managerial entrenchment hypotheses. Surprisingly, while cash dividend payments exhibit a robust positive impact on Tobin’s Q and market-to-book ratios, suggesting an overall positive link with market valuations, a closer inspection reveals divergent impacts for Chaebol and non-Chaebol firms. In Chaebol entities, dividend policy proxies consistently demonstrate positive effects on performance metrics, aligning with the interest alignment hypothesis and highlighting strategic signaling efforts. Conversely, non-Chaebol firms exhibit intriguingly negative impacts, supporting the managerial entrenchment hypothesis and implying potential challenges to market value. Firms should prioritize transparent communication on dividend policies for improved investor decision making and enhanced corporate governance in the dynamic Korean market.

Unconsolidated separate financial statements and dividends: Evidence from Korea

The purpose of this study is to investigate whether Korean parent firms manage dividend payments by taking advantage of the Commercial Act of Korea and accounting discretion allowed under the Korean IFRS. While IFRS adoption has transformed primary financial statements from unconsolidated to consolidated financial statements, the Commercial Act of Korea continues to compute distributable profits based on unconsolidated separate financial statements. The discrepancy between the earnings for financial reporting and the distributable profits provides an opportunity for a parent firm to manage dividends upward through internal transactions without affecting consolidated earnings. Using the parent firms listed on the Korea Exchange (KRX) during the period from 2001 to 2018, we examine whether these parent firms engage in dividend management through internal transactions to meet the dividend expectations of their shareholders in the post-IFRS period. We find that the parent firms with small consolidated but large unconsolidated earnings (‘SCLU’ firms) pay more dividends than others in the post-IFRS period when they have significant transactions with related parties. The dividend-increasing behavior of the SCLU firms through related-party transactions is more pronounced when the ownership of foreign shareholders or the largest shareholder is high. Our results suggest that Korean firms may pay excessive dividends by managing distributable profits despite poor consolidated performance in order to meet shareholders’ dividend demands.

Changing dividend payout behavior and predicting dividend policy in emerging markets: Evidence from India

Dividends have become increasingly important for capital market participants to achieve financial goals in the rapidly changing Indian economy. This study aims to simplify the evolving Indian dividend puzzle by analyzing the dividend trends, examining the evolving nature of firm and macroeconomic determinants of dividends, and developing a dividend policy prediction model. Dividend trends of 3,162 non-financial listed Indian firms from 2006–2022 are studied to gain insights about the Indian dividend puzzle. Regularization and logit models are used to explore the nature of impact of important dividend determinants. Data-mining methods are employed to build a robust model for dividend policy prediction. Trend analysis reveals a decline in the quantum of dividends and proportion of dividend-paying firms with approximately 90% of the dividend-payers belonging to the manufacturing and service sector. Further findings suggest that size, age, maturity, profitability, past dividends, earnings, and bank monitoring of firms had a favorable impact on the likelihood of dividend payments. Macroeconomic indicators such as GDP growth rate, repo rate, percentage change in equity issues, listings, gross fixed assets formation also had a positive impact. The annual percentage change in debt issues and new project announcements at the macro level with investment prospects at firm level negatively impacted dividends. Dividend prediction model based on the random forest technique achieved the highest prediction accuracy of 90.77% and 77.31% under binomial and multi-class situations. These findings are expected to help corporate executives, portfolio managers and investors proactively design optimal dividend policies and formulate their investment strategies.

The Life Cycle And Dividend Premium Toward Dividend-Paying Behavior In Manufacturing Sector Companies

This study aims to determine the independent variables that are able to predict dividend payment behavior and prove the occurrence of dividend catering theory in manufacturing companies that are in the growth phase. In determining the research sample, the researcher used purposive sampling. The number of samples in this study were 7 manufacturing companies with a total of 92 observations during 2015 – 2019. This study uses multinomial logistic regression analysis on SPSS 25. The results show that the dividend premium and profitability variables get positive and significant values in the high dividend payout model. as well as low dividend payout models. While the firm size variable gets a positive and significant value in the high dividend payout model, it does not get a significant value in the low dividend payout model. This means that in the high dividend payout model, the variables of premium dividends, profitability, and firm size are able to predict the behavior of dividend payments in manufacturing companies that are in the growth phase. However, in the low dividend payout model, only the dividend premium and profitability variables are able to predict the behavior of dividend payments in manufacturing companies that are in the growth phase. The results also prove that the dividend catering theory is proven to occur in manufacturing companies that are in the growth phase of 2015 – 2019.

THE EFFECT OF INFLATION ON DIVIDEND PAYMENTS: AN APPLICATION ON BIST

Çalışmada; şirketlere özgü faktörler dikkate alınarak enflasyonun kâr payı ödemeleri üzerindeki etkisinin araştırılması amaçlanmıştır. Bu amaçla, Borsa İstanbul’da (BİST) işlem gören ve 2013-2022 yılları arasında her yıl düzenli olarak kâr payı dağıtan 38 şirket çalışmaya dahil edilmiştir. Çalışmada enflasyon, kaldıraç oranı, likidite oranı, aktif karlılığı, özsermaye karlılığı, satışlardaki büyüme, aktiflerdeki büyüme ve şirket yaşı değişkenlerinin kâr payı ödemeleri değişkeni üzerindeki etkileri incelenmiştir. Söz konusu değişkenlerin analizinde ekonometrik yöntem olan panel veri analizi kullanılmıştır. Çalışmanın bulguları kapsamında, çalışmanın odak noktası olan enflasyonun kâr payı ödemeleri üzerindeki etkisinin istatistiksel olarak anlamlı ve pozitif yönlü olduğu tespit edilmiştir. Ayrıca, kaldıraç oranı, likidite oranı, özsermaye karlılığı, aktiflerdeki büyüme ve şirket yaşının da kâr payı ödemeleri değişkeni üzerinde istatistiksel olarak anlamlı bir etkisi olduğu görülmüştür. Tüm sektörlerdeki kâr payı ödeme alışkanlığı olan şirketlerin üzerine yapılan bu çalışmadan elde edilen sonuçların enflasyonist dönemlerde, yatırımcı tercihlerine ve yönetici kararlarına yön göstermesi beklenmektedir.

The role of tax enforcement on green innovation: Evidence from the consolidation of state and local tax bureau (CSLTB)

Literature on environmental governance in developing countries often attributes environmental issues to the sub-national governments’ lenient enforcement of the law. Based on the data of A-share listed companies spanning from 2010 to 2020, this study conducts a difference-in-differences estimation exploiting an exogenous shock in tax enforcement caused by the Consolidation of State and Local Tax Bureau (CSLTB) in China. We identify strong evidence that the CSLTB decreases corporate green innovation, which is consistent across a range of robustness checks. Mechanistic tests show our primary discoveries are motivated by the liquidity constraint channel, which is manifested by an improvement in firms’ effective tax rate, cash holdings, and a decrease in dividend payments. Finally, our study reveals this negative effect exerted by tax enforcement with respect to corporate green innovation becomes particularly pronounced among firms with strong financing constraints, poor profitability, strong legal environment, non-state-owned firms, and poor tax transfer capability. Overall, this study enriches the study of tax enforcement and provides further insight into the environmental effects of non-environmental policies.

The dividend policy of business entities and the analogy of law

Author discovers uncertainty that generates ambiguous administrative and judicial law enforcement on the issue related to the limits of business entity freedom in the creation and implementation of dividend policy. Importance of such insufficiently clearly regulated by corporate legislation aspects of the dividend policy as the scope of corporation's powers and limitations in determining frequency of making decisions on dividend payments and timing of the actual distribution of profits among the corporation's participants is shown. Special relevance of the doctrinal study and regulatory clarification of the relevant legal parameters of the dividend policy of domestic corporations is associated by the author with the need to overcome the negative consequences of the sanctions impact of unfriendly foreign states. The presented author's approach is aimed at ensuring greater variability of corporate and legal interaction and increasing the efficiency of business entities. Special technical and legal tools were used in the study, including the method of analogy, as well as civilistic means of analysis and synthesis, comparison and generalization. The idea of the possibility and practicability of flexible negotiation of this uncertainty based on the normative construction of the analogy of law, on the basis of the general principles and meaning of civil legislation, as well as through the analogical use of explanations on understanding of the imperativeness and optionality of legal norms contained in the Resolution of the Russian Federation Supreme Arbitration Court Plenum dated March 14, 2014 No. 16 «On freedom of contract and its limits» is argued. As a result, conceptual admissibility of «nonmonotonic» dividend accruals, not linked to calendar quarters has been proved, as well as the possibility of large delays in the actual payment of declared dividends in comparison with the periods pre-established by norms. Main conditions for the implementation of such a measure of freedom in determining dividend policy are identified, namely its focus on achieving a balance of corporate interests and availability of an actually generated net profit for a business entity.

Research on Dividend Distribution Policies of Listed Companies in China's E-commerce Industry-Taking Focus Technology as an Example

Scientific and reasonable dividend distribution policy is of great significance for the future development of the company. By analyzing the dividend distribution of Focus Technology Co., Ltd, this paper evaluates the dividend distribution policy of Focus Technology from the influencing factors of the two major dividend distribution policies, namely, profitability and development stage. In the process of research, it is found that the dividend distribution of listed companies in China has the problems of a single form of dividend distribution and poor stability of payment. In view of these problems, the author puts forward countermeasures such as enriching the dividend payment methods and improving the corporate governance structure. This paper hopes this paper can play a certain role in promoting the research of dividend distribution policies of related companies.

Does parenting daughters increase corporate cash dividends? Evidence from Chinese family firms

Research in the social sciences has shown that interactions with biological daughters are potent catalysts for instilling and nourishing parents' social values, preferences, and behaviors. Drawn on the female socialization hypothesis, we investigate the impact of ultimate controlling owners’ offspring gender on corporate dividend policy. Based on data from Chinese family-owned listed companies, our empirical results document a “daughter effect” in cash dividends. That is, ultimate controlling owners shaped by daughters are more altruistic and less likely to exploit the interests of minority shareholders, which leads to more dividend activities. The results remain robust when considering endogeneity. Moreover, the “daughter effect” is more pronounced when the ultimate controlling owner is male, has a higher education background, and has been influenced by the daughter for a longer time. This paper contributes to the growing literature on female socialization and the determinants of dividend payments.

PENGARUH DIVERSIFIKASI PERUSAHAAN TERHADAP CASH HOLDING

This study aimed to determine the effect of company diversification on cash holding in manufacturing companies listed on the Indonesia Stock Exchange in 2015-2019. The research method used in this research is a quantitative approach, with the population used in this study are manufacturing companies listed on the Indonesia Stock Exchange (IDX) between 2015 and 2019. The sample is manufacturing companies listed on the IDX in 2015-2019, obtained 29 samples with 5 years of observations totalling 145 observations. The results showed that company diversification affects cash holding. Therefore, company management can consider the effect of dividend payments in determining the company's cash-holding policy. However, keep in mind that the right cash holding policy must also consider other factors such as investment policy, funding policy, and company risk.

The Impact of Surplus, Promoter Holding, Leverage and Retained Earnings on Dividend Payment Decisions: Evidence from Small- and Mid-sized Firms in India

Free cash flow is a crucial component in deciding the dividend payout ratio; but literature has not sufficiently explored the effects of the same, specifically on dividend payment decisions. We therefore examine whether a firm’s deficit or cash surplus affects ‘cash dividend payout’ for Indian small- and mid-sized firms. Also, we have explored the idea of studying the effect of promoter holding on the dividend policy of mid-cap and small-cap firms listed in the stock exchange of India. Our study also determines the relationship between retained earnings and the dividend policy. The sample of the study includes 174 non-financial companies from the NIFTY MidSmallcap 400 Index from April 2011 till March 2019. Applying the Logit and Tobit models, we have arrived at the findings. Our findings demonstrate that surplus cash positively influences the decision of paying dividends in both mid-cap and small-cap firms. The findings also indicate that mid-cap firms use retained earnings for scaling up rather than distributing dividends and small-cap firms distribute dividends. We prove that Indian business houses with high promoter holdings are less in favour of distributing dividends. The results have the limitation of geography and period and may not be valid for other countries.

OWNERSHIP STRUCTURE AND DIVIDEND POLICY OF LISTED OIL AND GAS COMPANIES IN NIGERIA

The study examines the effect of ownership structure on dividend policy of listed oil and gas companies in Nigeria. The independent variable was proxied using managerial ownership, government ownership and foreign ownership. On the other hand, dividend policy was proxied by dividend payout ratio. The study employed the ex-post facto research design in analyzing the panel data collected from eight (8) oil and gas companies sampled from a total population of twelve companies listed on the Nigerian Exchange Group (NGX). the study covered a period of ten years (2013 to 2022) while the purposive sampling technique was employed. The multiple regression technique of analysis was employed in analyzing the data and the results of the analysis revealed a positive and significant relationship between Managerial Ownership and Dividend policy. Thus, suggesting that, an increase in the proportion of shares held by management would results in increased dividend payment. On the contrary, government ownership and foreign ownership had no significant effect on dividend policy of listed oil and gas companies in Nigeria. The study therefore concludes that, managerial ownership would influence dividend payment. Hence it is recommended that, managerial ownership of oil and gas companies be monitored by regulatory agency to ensure compliance with relevant codes and provision.

FinTech adoption and rural economic development: Evidence from China

In the context of China's rural economic landscape, the emergence of Financial Technology (FinTech) has induced transformative economic impact. This study utilizes a composite county-level FinTech index and data from China's National Fixed Point Survey (NFS) to analyze the impact of FinTech adoption on rural economic development. The empirical findings outline a positive correlation between FinTech adoption and enhancement in rural household earnings, especially on wage and property incomes, thus narrowing urban-rural income gap. For wage income, we find that FinTech has provided new non-agricultural employment opportunities to rural households, especially in service sectors closely related to FinTech. For property income, the development of FinTech has provided effective financial services and supported the operations of rural enterprises, thereby increasing dividend payments to rural households who contribute their unused arable land to these enterprises due to labor transformation from agriculture to non-agricultural sectors. This research extends the existing studies of FinTech literature by illustrating its role in fostering rural economic growth within the Asia-Pacific emerging markets.

The intervening role of capital structure in the impact of funding surplus on dividend payments

The intervening role of capital structure in the impact of funding surplus on dividend payments