Dividend Policy Of Firms Research Articles

Managerial Irrationality and Dividend Policy of Non-Financial Firms in Nigeria

Managerial Irrationality and Dividend Policy of Non-Financial Firms in Nigeria

The effect of modern information technology on corporate payout policy. Evidence from EDGAR implementation

PurposeThis study uses the Electronic Data Gathering Analysis and Retrieval (EDGAR) implementation as an information shock to examine its effect on corporate payout policy.Design/methodology/approachThis study uses a generalized difference-in-differences approach to assess the causal impact of EDGAR implementation on the US publicly traded firms’ payout policy for a period from 1990 to 1999. The approach captures the difference between changes in the dividend policy of firms subjected to EDGAR implementation (treated firms) and those not subjected to the implementation (control firms).FindingsFirms increase payout ratios and the likelihood of paying dividends after the implementation of EDGAR. Notably, these effects are more pronounced in firms characterized by high agency problems ex-ante.Practical implicationsPolicies designed to improve a firm’s information environment may yield divergent effects on corporate payout policy. Consequently, in countries aiming to promote cash dividends, policymakers seeking to enhance the firm information environment should carefully consider initiatives that will improve minority investors’ access to corporate information.Originality/valueThe findings contribute to the real effects of EDGAR implementation on firm policies, addressing the ambiguity surrounding the economic consequences of EDGAR adoption. This paper also contributes to the existing literature on the impact of information shock on corporate payouts. The findings emphasize the multifaceted influence of information shock on corporate payouts.

Determinants Factor of Dividend Policy with Company Size as a Moderation Variable

This study looks at how company size (SIZE) moderates the effects of profitability (ROI), liquidity (CR), and leverage (DER) on dividend policy (DPR) in food and beverage firms listed on the Indonesia Stock Exchange between 2017 and 2021. Purposive sampling is the procedure used in the sampling approach. This study's sample comprised sixteen companies listed on the Indonesia Stock Exchange. Multiple regression and moderated regression are the analysis techniques employed, with a 5% significance level. The study's pre-moderation results demonstrate the significant influence of the variables Profitability (ROI) and Leverage (DER) on Dividend Policy. The study's post-moderation results demonstrate the significant influence of Liquidity (CR), Leverage (DER), and Company Size (Size) on Dividend Policy. The executive. The managerial implications in this study are that management needs to set clear, realistic financial performance targets to ensure that the company is able to achieve sufficient to support dividend policy, and large companies can take advantage of economies of scale to improve financial performance, which in turn can support a larger dividend policy stable. Management must ensure efficient cash flow management to support dividend payments.

The Impact of Environmental, Social, and Governance (ESG) Performance on Dividend Policy and Economic Outcomes of Pakistani Firms: A Survey-based Research

The purpose of this study was to measure the effectiveness of environmental, social, and governance performance on the dividend policies of registered firms on the (PSX) Pakistan stock exchange. A data set of 261 respondents from the employees of companies listed on the Pakistan Stock Exchange was collected and analyzed using Smart PLS 3. The findings of measurement model assessment and structural model were used for the analysis of the data. Based on the statistical data, the study found that environmental performance, social performance, and governance performance are three significant antecedents of the dividend policy of registered firms on the Pakistan stock exchange (PSX). The research has contributed to the literature about implications of dividend policy. The policy implications of this research are also significant for improving the dividend policy of firms registered on the Pakistan Stock Exchange. This study also aligns with the Sustainable Development Goals (SDGs), particularly SDG 12 (Responsible Consumption and Production) and SDG 13 (Climate Action), by examining how ESG performance influences dividend policies in firms on the Pakistan Stock Exchange. The findings underscore the importance of integrating sustainability into corporate strategies to enhance financial outcomes and support global sustainability targets.

Multiple directorships and dividends in Spanish listed firms

This study analyzes the impact of directors belonging to several boards (multiple directorships) on the dividend policy of firms. As the composition of a board has an impact on its effectiveness and the quality of corporate governance, this study focuses on the presence of multiple directorships. Theoretically, the literature presents two competing hypotheses regarding the impact of this type of directorship on firm performance—reputation and dedication hypotheses. Based on a sample of nonfinancial companies listed on the Spanish stock market from 2008 to 2019, the study finds that a greater presence of multiple directorships increases the propensity of firms to pay dividends, as well as the level of cash dividends, supporting the reputation hypothesis. In addition, we find that ownership concentration moderates the relationship between multiple directorships and dividends.

Impact of Business Risk and Board of Directors Size on Dividend Policy in ASEAN-5 During the COVID-19 Pandemic

The objective of this investigation is to scrutinize the determinants influencing the dividend policies of financial sector firms listed on the stock exchanges in each of the ASEAN-5 countries, namely Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Employing a purposive sampling method, this research encompasses a sample of 195 companies meeting specific criteria during the COVID-19 pandemic spanning from 2020 to 2022. Researchers employed a probit model logistic regression, utilizing Eviews 12 software, to assess the impact of business risk and board size on dividend policy. The outcomes indicate that the independent variable of business risk exerts a negative influence on dividend policy, whereas the independent variable of board size exhibits a positive effect. Additionally, the research introduces a control variable, Gross Domestic Product (GDP), revealing a negative impact on dividend policy. The outcomes of this research serve as a managerial tool for enhancing company performance and augmenting dividend disbursements, thereby capturing the attention of shareholders.

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.

Managers' perception of dividend policy in Nigerian firms

Managers' perception of dividend policy in Nigerian firms

Effects of Banks Specific Factors on Dividend Policy: A Case of Commercial Banks of Pakistan

Looking at the dividend situation more attentively makes it seem like a jigsaw puzzle with pieces that don't match. The primary aim of this research is to ascertain the impact of industry-specific variables on the dividend policies of commercial banks that are publicly traded on the Pakistan Stock Exchange. In this context, the dependent variable is dividend policy, as indicated by the dividend payout ratio proxy. The independent variable comprises bank-specific variables, including revenue growth, ownership structure, liquidity, profitability, financial leverage, taxation, and the firm's life cycle. Secondary data spanning the years 2009 to 2019 was meticulously gathered from the annual reports of every bank under consideration. Descriptive statistics (mean, standard deviation, minimum, and maximum value) and inferential statistics techniques (pooled ordinary least squares (OLS) and fixed effect models) are employed to analyze the data. The findings from the fixed effect model indicate that the predictors of ownership structure, liquidity, profitability, leverage, taxation, life cycle, and development account for 84% of the variance in firm dividend policy. These predictors have an effect of 0.84 percent on the dividend policy. The dividend policy is significantly and positively impacted by profitability and financial leverage, based on what the fixed effect model found. Conversely, the life cycle of the company exerts a substantial and adverse influence on dividend payments.

Dividend policy and firm liquidity under the tax imputation system in Australia

PurposeThe primary goal of this paper is to investigate the relationship between stock market liquidity and firm dividend policy within a market implementing the tax imputation system. The main aim is to understand how the tax imputation system influences the relationship between firm dividend policy and stock market liquidity within a cross-sectional framework.Design/methodology/approachThis paper investigates the relationship between stock market liquidity and the dividend payout policy under the full tax imputation system in the Australian market. This study uses the Generalized Least Squares regressions with firm- and year-fixed effects.FindingsIn contrast to the negative relationship between the liquidity of common shares and the firms' dividends documented in countries with the double tax system, the study reveals that in Australia, the dividend payout ratios are positively associated with liquidity after controlling for various explanatory variables with both the contemporaneous and lagged time periods. Such a finding is robust to the use of alternative liquidity proxies and to the sub-period tests and remains during the COVID-19 pandemic period.Research limitations/implicationsThe insights derived from this study have significant implications for various stakeholders within the economy. The findings provide regulators with valuable insights to conduct a more holistic assessment of how the tax system impacts the economy, especially concerning the dividend choices of firms. Within the context of a full tax imputation system, investors can make investment decisions without factoring in the taxation impact. Simultaneously, firms can be relieved of concerns about losing investors who prioritize liquidity, particularly when a high dividend payout might not align optimally with their financial strategy.Originality/valueThis study contributes to the literature by extending the literature on the tax clientele effects on dividend policy, providing evidence that the tax imputation system can moderate the impact of liquidity on dividend policy. This study examines the impact of the dividend tax imputation system on the substitution effect between dividends and liquidity.

Effect of Agency Costs on the Relationship between Dividend Policy and Value of Firms Listed at the Nairobi Securities Excha

Effect of Agency Costs on the Relationship between Dividend Policy and Value of Firms Listed at the Nairobi Securities Excha

Applications of Machine Learning and Determinants of Dividend Decision : Evidence from Indian Firms

Purpose : The theories of dividend decision have disentangled the firms’ critical drivers of the dividend announcement, and their performances are empirically evaluated by employing ordinary least squares (OLS). However, after more than half a century of research, the debate over the determinants of dividend policy in firms is inconclusive. Therefore, the current study attempted to contribute to the literature by exploring new insights into the dividend decisions of Indian firms by employing machine learning. Methodology : This study is based on secondary data, and empirical analysis has used a novel dataset of 919 listed Indian nonfinancial firms from 1999–2019. The study utilized the least absolute shrinkage and selection operator and logistic regression methodologies. Findings : The findings revealed that the idiosyncratic variables are critically significant for dividend announcements by Indian firms. The results demonstrated that large, profitable, liquid, and firms with high market share were more likely to announce dividends in India than small, loss-making, illiquid, and low-market share firms. The direct relationship between Tobin’s Q and the likelihood of paying dividends is a new insight into the dividend decision for Indian firms. Practical Implications : The results will guide the dividend seeker investors to hold the shares of a high market share firm to receive the expected dividend. Originality/Value : This current study extended the literature by studying the dividend decisions of Indian firms by employing the machine learning methodology.

Opportunity costs and the value of corporate social responsibility: evidence from firm dividend policy

ABSTRACT Theories of CSR value under a real-option framework suggest that the payment of dividends serves as an opportunity cost. One of the resulting predictions is that the value of CSR spending is lower for dividend paying firms. We examine this prediction empirically. While we find that CSR is positively related to firm value for both dividend payers and non-payers, CSR is roughly 50% less valuable to dividend payers than non-dividend payers.

High-tech firms: Dividend policy in a context of sustainability and technological change

We examine whether the dividend policy of high-tech firms is explained by ESG performance in the triple ESG components (environmental, social, and governance). Using a panel of US-based firms in the technology sector from 2002 to 2021, we find that better ESG scores are linked with a higher likelihood of dividend payments, stability of the amount paid, and implied shareholder returns from the dividend yield. R&D intensity is a constraint of dividend policies, although ESG scores mitigate this adverse effect by helping increase the likelihood of dividend payments. Overall, our findings highlight the role of ESG scores in enabling high-tech firms to implement dividend policies that yield stable returns to investors.

The Moderating role of Covid-19 Epidemic on the relation between Stock Market Liquidity and Firm Dividend Policy Applied research on the Egyptian Stock Market

The Moderating role of Covid-19 Epidemic on the relation between Stock Market Liquidity and Firm Dividend Policy Applied research on the Egyptian Stock Market

DETERMINANTS OF DIVIDEND POLICY OF LISTED OIL AND GAS FIRMS IN NIGERIA

The largest companies worldwide face the challenge of differentiating the amount to pay as a dividend and the amount to retain for internal use. This study, therefore, aims to examine the main determinants of dividend policies of oil and gas firms in Nigeria. The primary study objective was to study how determinants like earnings, liquidity, state of the economy, and total assets of the companies significantly impact the dividend payout ratio of listed oil and gas companies in Nigeria. Ten listed oil and gas companies were selected, and secondary data were gathered from their financial statements from 2010 to 2020. The fixed effect and the random effect regression analysis estimated the data, while other post-estimation techniques, such as the Hausman test, were used to select between the fixed and random effect panel regression that was the best fit for the study. The Hausman test selected the fixed effect regression. Therefore, findings from the fixed effect regression showed that earnings and the state of the economy were positively significant in impacting the dividend payout ratio. Total assets were negatively significant, while liquidity was insignificant, affecting the dividend payout ratio. The study recommended, among others, that Nigerian oil and gas firms should build and manage their total assets effectively and efficiently, as this would determine and influence their dividend policy decisions.

Determinants of Dividend Policy in Foods and Beverages Manufacturing Firms in Nigeria

Determinants of Dividend Policy in Foods and Beverages Manufacturing Firms in Nigeria

The role of Business Group Affiliation on the Determination of Firm's Dividend Policy Decisions: Evidence from India

This research article examines the role of business group affiliation on the determination of firm’s dividend policy decisions (i.e. dividend payment decision and dividend payout level decision) for 703 National Stock Exchange (NSE) listed Indian firms during 1995-2018. In order to analyze the dividend payment decision (i.e. whether to distribute or not to distribute dividend?) a dichotomous logit regression analysis is utilized on the other hand, for the purpose of analyzing the dividend payout-level decision (i.e. how much amount of dividend to be distributed out of total earnings?) a tobit or censored regression analysis is utilized. The study finds from the comparative analysis that the dividend payout ratios of firms affiliated with the business groups are higher than that of unaffiliated firms (i.e. standalone firms). The econometric analysis indicates that the firms’ affiliation with the business groups have a direct association with the likelihood of firms paying dividends. The firms affiliated with the business groups are more likely to distribute dividends and their dividend payout levels are higher than the unaffiliated firms (i.e. standalone firms). The dividend policy decisions of business group affiliated firms are less sensitive to size, profitability, investment opportunities, financial leverage and firm’s life-cycle stage on the other hand, they are more sensitive to free cash flow and business risk.

Effect of Family Involvement and Corporate Governance on Dividend Policy: A Study of Non-Financial Listed Firms in Morocco

Current research on the determinants of dividend policy has focused on the study of developed countries, while
 research on emerging countries remains limited. The objective of this research is to study the effect of the
 involvement of the family firm on dividend policy. This paper uses Ordinary Least Squares regression, we
 analyzed data for Moroccan nonfinancial firms listed on the Casablanca Stock Exchange over the period
 2015-2017. The results of this paper show that family firm pay less dividends than non-family firms. Thus,
 ownership concentration and firm size influence dividend policy, unlike the composition of the board of
 directors, which doesn’t influence it. Our paper contributes to broaden our understanding of the effect of the
 family firm on dividend policy in one of the emerging countries. It is suggested that the characteristics of
 corporate ownership determine the share of profits to be distributed, not to say dividend policy, since
 concentration of ownership limits the power of minority shareholders to make their voices heard. Despite the
 presence of laws protecting minority shareholders, their room for maneuver remains limited. Our paper
 enriches the existing literature on the family firm dividend policy by studying the Moroccan context. The results
 show that family ownership and family CEO involvement do not have the same influence on the dividend policy
 of family firms, but it depends on the context. Our paper also provides relevant information for practitioners
 regarding dividend policy in Moroccan family firms.

Corporate Dividend Policies during the COVID-19 Pandemic

In this paper, we examine the changes in corporate dividend policies during the COVID-19 shock. For empirical analysis, we employ annual data of 360 companies from the Pakistan Stock Exchange over the period 2015–2020. Using descriptive analysis and Logit regression models, we find that firms were more likely to either omit or reduce dividend payments during the pandemic year of 2020 as compared to the trends in pre-COVID-19 years of 2015–2019. Further, firms with higher profitability, asset turnover and size were less likely to opt for dividend omissions. On the contrary, dividend omissions were more likely among firms with higher debt ratios. The findings of this study helps to understand firm dividend policies during crisis periods.