Dividend Policy Of Firms Research Articles

Dividend Policy of Banking Firms in Nepal: A Survey of Managerial Perspectives

This paper analyses the views of managers of banking firms in Nepal to understand their perceptions towards dividend theories and factors affecting dividend policy. Based on a mail survey among 79 directors and CEOs of banking firms in Nepal during the months January to March 2022, the study suggests that managers prefer at most the combination of cash and stock dividend to be distributed to their shareholders. With respect to their preferences towards given form of dividend payments, managers claim that they generally go with shareholders’ preferences in deciding the forms of dividend payments. The study results further demonstrate strong support for signalling and bird-in-hand explanations of dividend theories. Among the 14 factors affecting dividend policy, the study reveals that firm’s level of current earnings, including the pattern of past earnings and stability of earnings are important factors in determining dividend policy of banking firms in Nepal. The survey evidence documented in this study further verifies the significance of signalling hypothesis in recent period in case of Nepal to explain why managers prefer to pay dividend. The main implication of the findings of this study is that it explores, in the changing context of meeting regulatory capital requirements, how the banking managers perceive about dividend policy of Nepalese banking firms. The finding of the study is primarily useful to investors seeking for investment in dividend paying banking firms in Nepal

Determinants of Dividend Policy of Non-Financial Publicly Traded Firms: A Review

Purpose: This study examines all the financial literature available on the empirical studies conducted to investigate the dominants of factors that affect the dividend policy of non-financial and publicly traded firms. In preparing this review article, Preferred reporting items for systematic reviews and meta-analysis (PRISMA) have been employed to examine the systematic review thoroughly. Methods: The study enlists six main models that provide theoretical explanations of DIV policy: signaling theory, Agency Costs, cash flow theory, bird in hand theory, clientele effects of DIVs hypothesis, tax effect hypothesis, and DIV irrelevance theory. Furthermore, this study enlists the various empirical studies conducted to determine the factors that affect the DIV policy of non-financial publicly traded companies. Findings: In this study total of 400 papers have been screened, and 26 of them found relevant and appropriate. The study only reviewed the studies undertaken by non-financial companies, and the financial firms have been excluded. Furthermore, only publicly traded firms are included in the study. This paper summarizes main theories that explain dividend policies including signaling theory, agency cost cash flow theory, bird in hand theory, and dividend irrelevance theory among others. Moreover, it outlines and identifies major factors that are investigated in empirical studies as determinants of dividend policies of publicly-traded non-financial firms. Originality/Value: This study examines all the financial literature available on the empirical studies conducted to investigate the dominants of factors that affect the dividend policy of the non-financial and publicly traded firms.

The impact of influential shareholders on corporate dividend policy: evidence from Russia

PurposeThis study examines the impact of influential shareholders, namely, state and influential businessmen, on the dividend policies of firms. A special focus is made on the causal effect of exogenous changes: general and personal economic sanctions leading to toughened state policies concerning dividends.Design/methodology/approachRussian firms included into the Moscow Stock Exchange Broad Market Index were examined for a period from 2009 to 2019 using a generalized method of moments and a tobit model. The effect of personal sanctions was elucidated with the use of difference-in-differences method with multiple time periods.FindingsThe analysis showed that government or businessmen's ownership does not affect dividend payments. However, after 2014, state-owned companies began to increase their payments. At the same time, owing to a series of changes triggered by general economic sanctions, businessmen-owned companies decrease their dividends payout ratio. Personal sanctions imposed do not have long-term effect on Russian companies' dividends.Originality/valueThis study estimates the effect of ownership structure on dividend payouts after an exogenous change. The results show that there is heterogeneity in influential owners' decisions regarding dividends and changes strengthening it.

Dividend Policy in Firms Listed at the Nairobi Securities Market: Does Shareholder Activism Matter?

Purpose: This study investigated the effect of shareholder activism on dividend policy. Design/Methodology: The study adopted an explanatory research design, specifically the ex-post factor design. The panel data was drawn from 54 listed firms at the Nairobi Securities Exchange (NSE) in eleven different sectors between 2008 and 2017. The study units were annual audited reports. Findings: The results showed that shareholder activism had a positive and significant effect on dividend policy, b 1 =0.0992, p<.05. This effect was significant at the one percent significance level. The inclusion of both growth in sales and firm size as covariates maintained the significant effect of shareholder activism on dividend policy, b 1 =0.0992, p=.05, indicating robust results. Originality: This study confirms that shareholder activism strongly influences the dividend decisions of firms. It contributes to the emerging trends of corporate governance, which demand the embracement of key stakeholders in major decisions. It provides an opening on control of management indirectly through shareholding. Practical Implications: It is prudent for company executives to understand the nature of shareholder activism and their perception of dividend policy, match activism and dividend policy, and the company's future. Firms should also design policies to forge a fair distribution of share ownership between large and small shareholders and be wary of concentrating shareholder activism among large shareholders. Dividend policies must also factor in firm size and growth in sales.

The Effect of Institutional Ownership, Families’ Ownership, Ownership Concentration and Dividend Policy Towards Firm Performance

This purposed of this study is to analyze the effect of institutional ownership, family’s ownership, ownership concentration and dividend policy towards firm performance. This type of quantitative research, the data used secondary data. The population in this research were the manufacture companies listed in Indonesia Stock Exchange (BEI) during period 2015 until 2017. Sample selection method was using with technique purposive sampling, with certain proposals selected by 90 companies. Data collection methods in this research are literature study and internet access. The data was analysed by multiple linear regression. The results showed that institutional ownership has impact toward firm performance, family’s ownership does not impact toward firm performance, ownership concertation has impact toward firm performance and dividend policy has impact toward firm performance.

Kurumsal Yönetimin Firma Temettü Politikası Üzerindeki Etkisi: Gana Örneği

The purpose of this research is to reveal at the influence of board independence on dividend policy of firms listed on the Ghana Stock Exchange. We employ a panel dataset covering the period 2008-2018 and apply the generalized method of moments technique. The results reveal that dividend per share is positively and significantly driven by board independence. We also find that larger audit committees are more likely to result in higher dividend payouts. On the other hand, frequent board meetings and remuneration committees reduce dividend payments. We further document that firm age has a significant positive impact on dividend payment. The findings suggest that increasing the proportion of non-executive directors will help preserve shareholders' interest by allowing for higher dividend payments.

Internal Dynamics of Dividend Policy in East-Asia: A Comparative Study of Japan and South Korea

Japanese and Korean financial systems are distinct from those in the western economies. Considering this, we examine how the dividend policy of the firms in two of the largest economies of East Asia is determined by the internal attributes of firms. Firm-level data from 1,773 Japanese and 1,035 Korean firms were evaluated using panel data techniques, and some interesting similarities and differences in the dividend policies of both countries were unearthed. For example, in both countries, larger firms pay higher dividends, whereas those firms with volatile earnings pay low dividends. It was also determined that Korean firms pay more dividends when their profitability surges. On the other hand, cash dividends in Japanese firms decline when there is an increase in their profitability level. Overall, the dividend policy of Korean firms resembles more to those in Anglo-Saxon countries, while the dividend policy of Japanese firms bears little resemblance to other established financial systems. This study is the first to compare and contrast the internal dynamics of dividend policy for both the Japanese Keiretsus and Korean Chaebols while evaluating a huge universe of firms from both countries. Transnational studies are important to draw parallels and differences. The findings of this study offer important implications for various stakeholders, including managers, investors, and policymakers. Also, the results pave the way for a theoretically enriched understanding of dividend policy by comparing and contrasting diverse financial systems.

Dividend policy, ownership structure and corporate governance: An empirical analysis of Indonesian firms

One of the essential aspects of corporate policy is the decision on dividend payments as this dividend policy affects the value of the company. This study aims to determine whether there is a possible association between dividend policy, ownership structure, and corporate governance of Indonesian financial firms. This study offers empirical evidence on the relationship between variables in the context of Indonesia, which is a frontier market. The sample includes financial firms listed on the Indonesia stock exchange during the period between 2011 and 2017. Data analysis techniques were performed by using ordinary least square regression. Based on the result of 242 observed data analyses, it was found that while managerial ownership has no significant but positive effect on the dividend payout ratio, institutional ownership has significant and negative effects on dividend policy for sample firms. This positive relationship reflects that increasing the percentage of managerial ownership at one particular point, will make managers think that there is no longer any benefit in increasing dividend payout. Moreover, the total number of directors has a significant negative effect on dividend payout and the percentages of an independent members of directors have a positive but not significant effect on dividend policy. This result reflects that the independent board has an essential role in directing management to protect stakeholders' interest in the company. The study also reclaimed that dividend policy is positively and significantly influenced by profitability but inversely proportional to capital structure.

PENGARUH UKURAN PERUSAHAAN, PROFITABILITAS, KEBIJAKAN DIVIDEN, LEVERAGE DAN LIKUIDITAS TERHADAP NILAI PERUSAHAAN

This study aims to examine the effect of firm size, profitability, dividend policy, leverage, and liquidity on firm value in the basic industry and chemical sub-sectors of the cement industry listed on the Indonesia Stock Exchange for the 2016-2019 period. This study uses a quantitative paradigm by utilizing three issuer's quarterly financial statements which were analyzed using linear regression. The results of the analysis provide evidence that leverage and liquidity have a significant negative effect on firm value, whereas firm size, profitability and dividend policy contribute positively but cannot increase the firm values

Firm growth, Size, dividend Policy and Financing Choices of Nigerian Non-Financial Firms

Firm growth, Size, dividend Policy and Financing Choices of Nigerian Non-Financial Firms

Firm growth, Size, dividend Policy and Financing Choices of Nigerian Non-Financial Firms

Firm growth, Size, dividend Policy and Financing Choices of Nigerian Non-Financial Firms

Do ADR Firms Have Different Dividend Policies Than U.S. Firms? A Comparative Study

This paper examines and compares the dividend policies of American depository receipt (ADR) firms and U.S. firms and identifies the factors that determine these policies for both types of companies. We find that ADR firms have higher dividend yields than U.S. firms, while U.S. firms have higher stock repurchase ratios than ADR firms. Results from univariate comparisons and multivariate analysis show that the determining factors of dividend payout and stock repurchases differ between these two types of firms. This finding holds for the robustness check conducted in this study. This paper provides further evidence regarding dividend policies of ADR firms and sheds light on the differences in dividend policies between non-U.S. firm and U.S. firms.

Pengaruh Firm Size; Dividend Policy; Profitability; Dan Leverage Terhadap Firm Value.

The purpose of this study is to examine the effect of firm size, dividend policy, profitability, and leverage on firm value in manufacturing companies listed on Indonesia Stock Exchange in 2017-2019. This study uses a purposive sampling technique. This sample selection in this study was carried out using a sample selection based on criteria. There are 48 companies that have passed the criteria, so there are 144 samples for three years. The data in this study were processed with Eviews program version 11. The result of this study indicate firm size, dividend policy, and profitability do not have a significant effect on firm value. Meanwhile, leverage has positive and significant effect on firm value. Implication of this study is to give information for management about factor that will increase firm value.

Factors Influencing Dividend Payout of Firms Listed at the Nairobi Securities Exchange, Kenya

While various factors influencing a firms’ dividend policy have been evaluated by researchers, the outcome of these studies has not entirely resolved the controversies linked to dividend decision. There is little information on factors affecting dividend payout in different sectors among the listed firms in the NSE. The main objective of this research was therefore to establish the effect of defined firm characteristics on dividend policy of firms listed at the Nairobi Securities Exchange. The specific objectives of the study were to establish the effect of size on dividend payout policy of firms listed at the NSE, to evaluate the effect of leverage on dividend payout policy of firms listed at the NSE, to determine the effect of growth on dividend payout policy of firms listed at the NSE, and to establish the effect of liquidity on dividend payout of firms listed at the NSE. This study was based dividend irrelevance theory, dividend relevance theories of the bird at hand. This study employed the explanatory survey research design and the target population of this study was all 64 listed firms in the NSE for the five-year period of 2016 to 2020. The study collected data from 32 firms whose data was complete for the entire period of study. This made 160 observations. The study utilized secondary data which from the NSE handbooks. The data collected was analyzed using descriptive and inferential statistics. Regression results show that; firm size has a positive significant effect on dividend policy of firms listed at the NSE; leverage affects dividend policy negatively and significantly; firm growth has a positive significant effect on dividend policy; and that liquidity has a positive significant effect on dividend policy. The results from the research may benefit potential investors in deciding which sector to invest in. Future researchers in the area of dividend policy may also find results from this study important as it may lay a foundation to their studies.

Pengaruh Tangibility, Firm Size, Gender Diversity, Dan Growth Terhadap Capital Structure

This research has a purpose, to improve the effect of tangibility, firm size, gender diversity, and growth to capital structure on manufacture company that listed on Indonesia stock exchange during the year 2016-2018 with 69 sample.the model tahat use in this research was fixed effect model, common effect, and random effect model. The result of the research was tangibility has negative effect on capital structure, firm size has negative effect on capital structure, gender diversity and growth has no significant effect on capital structure.Keywords: Firm Value, Capital Structure, Liquidity and Dividend Policy.

Effect of Institutional and Insider Ownership on Dividend Policy: Evidence from Pakistan

This research study aimed to examine the effect of institutional and insider ownership on dividend policy of a firm. Ownership structure play a vital role in explaining firm dividend policy. To investigate the effect of institutional and insider ownership on dividend policy, a random sample of 50 non-financial firms was selected for the period of 2009 to 2013. The study based on panel data so for the selection of appropriate panel data model among pooled OLS, Random effect and Fixed effect, Breusch Pagan LM test, Chow test, and Hausman test were used and random effect model was found best fitted. Results indicated that institutional ownership has positive relationship while insider ownership has negative relationship with dividend payout. Further, inclusion of institutional ownership along with insider ownership has increased the explanatory power of the model by 5.56% which is the incremental effect of the institutional ownership. Moreover, free cash flows and leverage have negative while firm size and market to book value have positive relationship with dividend payout.

"Does Stock Market Liquidity Affect Firms' Dividend Policy?"

“The harder we look at the dividends picture, the more it seems like a puzzle, with pieces that just do not fit together” (Black, 1974). Since the days of Modigliani & Miller (1961), scholars have been studying dividend policy. However, until quite recently, the idea of liquidity has rarely been mentioned. The study examined whether there was a relationship between the firms' dividend policy and any shares' liquidity criteria in the Sri Lankan context. This study represented 100 companies listed on the Colombo Stock Exchange (CSE) and studied the performance throughout 2015-2019. Dividend policy becomes dependent, whereas Amivest liquidity, turnover liquidity, and Gopalan liquidity become explanatory variables. Amivest liquidity and turnover liquidity are stock market liquidity measurements, whereas Gopalan liquidity measures firm liquidity. The relationship between variables was evaluated using a combined linear regression method. The study has determined no meaningful relationship between dividend policy and liquidity measures of Amivest liquidity and turnover liquidity. However, the study detected a significant reverse relationship between dividend policy and Gopalan liquidity. It emphasizes that firm dividend policy is affected by the firm liquidity but not by the stock market liquidity in the Sri Lankan context. Based on the negative relationship between the firm's dividend policy and the Gopalan liquidity, it may be suggested that owners who have invested in high liquid companies are less likely to receive dividends. Management may then skip or reduce the dividend and reinvest further because of the lower propensity to pay. On the other hand, if the company is low in liquid, the expected dividends are higher than the capital gains. And in the case of a company's liquidity, management may have an idea of whether investors want dividends or capital gains. Consequently, investors also can make better investment decisions if they concern firm liquidity in the Sri Lankan context, and they can have better rewards as they prefer.
 Keywords: Colombo Stock Exchange, Dividend policy, Stock Market Liquidity

FAKTOR YANG MEMPENGARUHI NILAI PERUSAHAAN PERBANKAN YANG TERDAFTAR DI BEI TAHUN 2017-2019

Globalization causes increasingly rapid and intense competition between companies so that companies must continue to improve their performance in order to compete and survive for a long time. The banking sector is no exception. Banking sector stocks are stocks that are chosen by many investors when they are going to invest. Before making investment decisions in the capital market, investors need information about the value of the company or the value of shares which can be obtained by reading and analyzing financial statements. There are many factors that can determine the value of the company, including profitability, company size and dividend policy. This study aims to determine whether profitability, firm size and dividend policy affect firm value. The companies that are the object of this research are banking companies listed on the Indonesia Stock Exchange (IDX) in 2017-2019. Data was collected by purposive sampling based on predetermined criteria. The secondary data obtained were then processed by descriptive statistical methods and multiple linear regression analysis. The results of the study show that profitability variables can be proven to have an effect on firm value, while firm size and dividend policy variables cannot be proven to have an effect on the value of banking companies listed on the Indonesia Stock Exchange in 2017-2019. However, simultaneously, profitability, company size and dividend policy can be proven to have an effect on the value of banking companies listed on the IDX in 2017-2019.

Determinants of Dividend Policy in Sri Lanka: The Panel Data Analysis

The study aimed to emphasize the determinants of dividend policy in Sri Lankan firms. This study was conducted with 80 non - financial companies which were listed on Colombo Stock Exchange (CSE). The empirical research was focused on panel data analysis, and data was collected from annual reports for a five year period from 2013 to 2017. This study explored selected factors that influence dividend policy, including sales growth, leverage, firm size, profitability, EPS, liquidity, and risk. The panel data analysis employed pooled OLS, fixed - effect, and random - effect models. Based on the analysis, the fixed - effect model was thought to be the best fit for studying the factors that affect dividend policy. According to the outcome of fixed-effect model, among the seven input variables considered in this study, profitability, EPS, and risk were negatively linked to dividend policy. However, no significant relationship was found between dividend policy and sales growth, leverage, firm size, or liquidity. The findings contribute to the understanding that three parameters namely: profitability, EPS, and risk have been recognized as factors affecting dividend payouts in CSE’s listed companies. Hence, policymakers will be able to concentrate on the factors that influence shareholder wealth maximization. Keywords: profitability, EPS, risk, dividend payout

The influence of board independence on dividend policy in controlling agency problems in family firms

PurposeThis study aims to investigate the impact of board independence on the cash dividend payments of family firms listed on the Borsa Istanbul (BIST) in balancing controlling families’ power to mitigate agency problems between family and minority shareholders in the post-2012 period. The authors focus on this period because Turkish authorities implemented mandatory regulations on the employment of independent directors on boards from fiscal year 2012.Design/methodology/approachThe research model uses a panel dataset of 153 BIST-listed family firms over the period 2012–2017, employs alternative dependent variables and regression techniques and is applied to various sub-groups to improve robustness.FindingsThe empirical results show a strong positive effect of board independence on dividend decisions. The authors further detect that family directorship exhibits a negative effect, whereas both board size and audit committees have positive influences but chief executive officer (CEO)/duality has had no significant impact on the dividend policies of Turkish family firms since the new compulsory legal requirements in the Turkish market.Research limitations/implicationsThe findings suggest that independent directorship and dividend policy are complementary governance mechanisms to reduce agency conflicts between families and minority shareholders in Turkey, which is a civil law-based emerging country characterized by high family ownership concentration.Practical implicationsThe authors present evidence that Turkish family firms’ corporate boards have evolved, to some extent, from being managerial rubber stamps to more independent boards that raise opposing voices in family decision-making. However, independent directors’ preference for dividend-induced capital market monitoring implies that their direct monitoring is less effective than it is supposed to be. This suggests a need to revise the Turkish Corporate Governance Principles to enhance independent directors’ monitoring and supervisory power.Originality/valueThis is thought to be the first study to provide insights on how board independence influences dividend policy in controlling agency problems in Turkish family firms since Turkish authorities introduced compulsory rules on the employment of independent directors on boards.