Dividend Payments Research Articles

Eviews Analysis: Investigating the Relationship Tunneling Incentive, Leverage Ratio, and Hedging in Indonesian Stock Exchange-Listed Firms

Manufacturing companies carry out many operational activities, so the more activities carried out, the more problems will be faced, especially problems related to the company's finances. So that the company experiences less than the maximum profit. For this reason, accurate financial management is needed to record and measure manufacturing company costs and profits so that the financial problems that occur in these manufacturing companies can be prevented or minimized through appropriate financial and operational controls. The method utilized in this study is a causal relationship. From the research results obtained using Eviews12 for manufacturing, Tunneling Incentives, Leverage, and Hedging can increase company value. It can also be concluded that Tunneling Incentive, as measured by Distributed Ownership Structure, has no significant effect on Leverage and Hedging. In contrast, Tunneling Incentive, as measured by Concentrated Ownership Structure, has a positive and significant effect on Leverage and Hedging. The managerial implications of this research are how important tunneling is for companies. The emergence of tunneling is due to agency problems between majority and minority shareholders. By holding tunneling by the controlling shareholder, there will be no dividend payment so that the controlling shareholder benefits the minority shareholder.

Corporate taxation and macroeconomic dynamics in a monetary union: the French case

Using a post Keynesian stock-flow consistent (SFC) model with two countries in a monetary union (France and the rest of the euro area), we simulate different institutional configurations and highlight the relative inefficiency of public aid “à la française.” This result can be explained by the absence of any conditionality on the aid and by the context of financialization in which the tax cut is implemented. This observation leads us to question the reduction of public aid in a context of high public debt, the increase of which is limited by the institutional framework of the euro area. A second set of simulations, focusing on the increase in corporate taxes, reveals several results. If companies try to suppress wages in order to maintain profitability, an increase in levies on profits would have very high economic and social costs. To be effective, the introduction of differentiated taxation (higher levies on dividends paid) would have to be accompanied by a major institutional change, involving structural reforms aimed at reducing the importance of the financial sector and promoting productive, sustainable, and socially useful investment.

Deciphering the link: An empirical analysis of the interplay between economic value added and dividend payouts in the Indian corporate landscape

This study delves into the dynamic interplay between economic value added (EVA) and dividend payout among listed firms in India. Leveraging data spanning from 2013 to 2019 for 564 Indian-listed companies, the study employs a fixed effect panel regression model to meticulously examine the intricate relationship between EVA and dividend payout. The findings decisively indicate a significant and positive correlation between the two, underscoring that an augmented EVA is associated with an elevated dividend payout ratio. Notably, a compelling insight emerges, revealing that a 100 percent surge in EVA corresponds to a noteworthy 5 percent upswing in firms’ dividend payouts. To fortify the robustness of these findings, the study employs the Generalized Method of Moments (GMM) methodology, corroborating the initial results. In essence, this paper solidifies the notion that heightened economic value added translates to increased dividend payments, providing valuable insights for both practitioners and researchers in the realm of corporate finance.

Modelling of Dividend Payout Policy for Polish Public Companies

Purpose: The purpose of this research is to identify drivers of dividend payouts in energy companies listed on the Warsaw Stock Exchange (WSE) in the pre-COVID-19 pandemic decade, taking into account potential determinants such as general economic situation, company’s financial efficiency, value of assets, lagged dividend payout, earnings, ownership of the company – main shareholders and structure of statutory bodies including women presence. Design/methodology/approach: Correlation analysis and pooled regression models to determine the potential determinants of payouts are used. Firms' financial performance is reflected by selected individual financial ratios and a specially constructed vector synthetic measure VSMD. Findings: Findings reveal that dividend payouts of energy companies in Poland are irregular. Dividend payments significantly depend on firms’ financial efficiency, the size of their assets, lagged dividend payouts and ownership model, while the gender structure of statutory bodies has no impact on dividend payouts. The dividend payment decisions are implied by the current economic situation. Research limitations/implications: Limitations arise from the longitudinal sample design and data selection. Only Poland is considering with rather small WSE market, and the study concerns 9 companies described by 14 financial ratios (already selected) and set of variables for each year in 10 years timespan. Our VSMD measure needs pattern and anti-pattern which requires data from the entire market to be determined. Thus, the list of diagnostic variables cannot be simply copied for different “national” markets. Originality/value: This study contributes to research on the determinants of dividend policy. It introduces to the investigation the author's synthetic measure of firm financial efficiency. Explains dividend payments in Polish energy companies in the period 2010-2019 proposes a consistent baseline for research after the pandemic and after the war in Ukraine.

The Carrot and the Stick: Bank Bailouts and the Disciplining Role of Board Appointments

We empirically examine the Capital Purchase Program (CPP) used by the US government to bail out distressed banks and its implications for regulatory policy. We find strong evidence that a feature of the CPP—the government’s ability to appoint independent directors on the board of an assisted bank that missed six dividend payments to the Treasury—had a significant effect on bank behavior. Banks were averse to these appointments—the empirical distribution of missed payments exhibits a sharp discontinuity at five. Director appointments by the Treasury were associated with improved bank performance and lower CEO pay. (JEL G21, G28, G32, G34, G35, G38, H81)

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.

DIVIDEND POLICY IN MAINLAND CHINA AND THE US: A STUDY ON NON-FINANCIAL LISTED COMPANIES

This paper aims to assess the common characteristics of dividend payers and non-payers in both China and the US, as well as the stability of dividend policies in each respective nation. The study addresses issues related to catering theory, signal theory, smoothing assumptions, and Fama-French hypotheses. Our analysis covers 509 non-financial firms during the period 2006-2016, comprising 419 firms from the US and 90 firms from China. The multinomial regression reveals that past dividend payouts are critical in explaining dividend policy in both the US and China. Firms that have consistently paid higher dividends in the preceding year are more likely to opt for dividend increases rather than omitting dividends, thus aligning with the dividend smoothing hypothesis. Additionally, firm size and stock market performance were found to be significantly influencing dividend payouts across different categories in both the US and China. However, US firms primarily drove dividend payouts through profitability and the dividend premium, while firm size and leverage heavily influenced Chinese dividends. Interestingly, Chinese firms appear to practice a less sticky dividend policy than US firms, implying that the role played by dividend policy in signalling and catering theories in China is less significant than in the US.

A Study on performance of companies issuing bonus shares

The study provides a succinct overview of the findings from an in-depth analysis of bonus shares performance among selected Indian companies over the past two years. The study focused on assessing under pricing trends, post-listing shares performance, sectoral variations, investor sentiment dynamics, and regulatory impacts. The analysis revealed that many bonus shares experienced significant under pricing at their initial listing, particularly notable in high-demand sectors like technology.Shares performance varied across sectors, with companies like private and public sector shares performance over the long term. This suggests effective bonus shares . Moreover, the study identified positive shifts in bonus shares ,companies encourage more retail investors participation in their stock by lowering the price per shares and adding liquidity. And provide an alternative to issuing a dividend payment for rewarding investors and finally they reflect that the company is in a financially sound position to keep growing and generating shareholder value . In the study we have taken 5 shares which announced bonus last year and analzse the return we observed positive return in the sample taken. Bonus shares represent a critical juncture in a lifecycle of company, its transition marking from private ownership to becoming a traded publicly entity. For companies, bonus shares offer opportunities to access capital markets, fund expansion initiatives, and strengthen market position. For investors, bonus shares provide avenues for portfolio diversification and potential capital appreciation, albeit with associated risks. Analyzing bonus shares performance helps in identifying key success factors and challenges faced by companies in navigating the complexities of the Indian capital market. This study aims to comprehensively analyze and compare the bonus shares performance of the following 5 Indian companies: Power finance Power grid Safari Sonata Berger paints The objectives include evaluating their initial market reception, post-listing price movements, and strategic implications for stakeholders. By examining these bonus shares issues, we aim to discern trends, drivers of success, and challenges faced by companies across diverse sectors in Indian market.

Limited Firm Insurance and Aggregate Implications

This paper studies the impacts of financial shocks on firm insurance, firm dynamics, and macroeconomic implications. A key departure from the literature is that firms provide wage insurance contracts to risk-averse workers in a long-term relationship. Such contracts endogenously impose a form of inflexible debt liability to firms, and make firms with limited financial net worth more vulnerable to shocks than others. In our model, firms have heterogenous productivity and financial net worth, and also firms face financial frictions. Search and matching in the labor market endogenously determines the value of wage contract, and thus the level of liability to the firm. We have three new findings: (1) The wage dynamics of the quantitative model are consistent with those in empirical studies, with significant insurance against firm-level idiosyncratic shocks, and also a weak comovement between aggregate wage and GDP when there are aggregate shocks. (2) Firms with limited financial resources are hit by financial shocks significantly more than others, with larger negative impacts on dividends, credit borrowing, firm value, and firm entry; the endogenous wage insurance also becomes more limited, and there are more separations. These impacts on both firms and workers are different from—and cannot be accounted for by—standard models with a representative firm or worker. (3) Quantitative exercises for the Great Recession in the United States suggest that aggregate productivity shocks and financial shocks play different roles; without financial shocks, we cannot account for the dynamics of financial variables, including the reduced credit borrowing, spikes in credit spreads, and large drops in dividend payments. Lastly, we provide microlevel empirical supports for our model implications. This paper was accepted by Lukas Schmid, finance. Funding: Y. Wang acknowledges the financial support from the National Natural Science Foundation of China [Grant 72150003] and the grant from Shenzhen Municipal Government [Grant 1210614103]. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2023.01627 .

The Impact of Dividend Payments on Stock Price: Empirical Evidence From Companies Listed on the Brazilian Stock Exchange

The Impact of Dividend Payments on Stock Price: Empirical Evidence From Companies Listed on the Brazilian Stock Exchange

Dividend mispricing: Evidence from all‐stock merger deals

AbstractStock prices of targets in all‐stock merger deals should reflect acquirer share values, net of expected dividend payments before deal completion. This setting provides a unique opportunity to examine whether market prices of target stocks reflect the price reducing impact of impending acquirer dividends. We find evidence that target stock returns on the acquirer ex‐day are negatively related to the size of the dividend payments, indicating an incomplete adjustment on the last cum‐day. However, given the size of typical quarterly dividends, the magnitude of the estimated 30% incomplete adjustment to the dividend does not represent a viable arbitrage opportunity. Examining a longer window, we find that roughly 70% of the acquirer dividend is incorporated into the target stock price in the period two days after the dividend announcement to the ex‐day. Overall, our results are consistent with target stock prices adjusting slowly over time to reflect impending acquirer dividends.

Анализ показателей российского финансового рынка

The financial market is a key factor in economic development, an important tool for the redistribution and transformation of investment resources, as well as a litmus test of the state's economic health. The peculiarity of the Russian financial market is its "youth" and "inexperience" in comparison with the markets of developed economies, the path of trial and error, inconsistency in the context of the uniqueness of the financial system of the Russian Federation. This market is particularly vulnerable and volatile in the face of sanctions and global economic turmoil, so it needs competent targeting guidance, effective tools and verified coordination methods and techniques. The fundamental problems of the Russian financial market are quite deep and do not always appear on the surface, which requires an in-depth and permanent tactical and strategic analysis of factors, causes, trends, trends and indicators that can correct the situation in a timely manner in any economic scenario in manual management. The article examines the main features, rallies, features and directions of the development of the financial market of the Russian Federation at the present stage. The analysis of the issuer's statements for 2005–2023, dividend payments for the same period is presented, the dynamics of growth of the segment of mutual funds and exchange-traded mutual funds is considered. A comparative structure of household financial assets in 2017 and 2023 is proposed, the share of different organizational and legal forms of joint-stock companies in the total number of joint-stock companies in 2019–2023, the share of different groups of banks in the value of assets of the Russian banking system in 2000–2023 is given. The final results of the study substantiate the importance of the role of the state as a regulator of the stock market, emphasize its Russian functions, and highlight its conceptual problems. The research is based on the analysis of foreign and Russian publications, as well as on statistical conclusions of financial and statistical data.

Testing of Semi Strong form of Market Efficiency of Indian Capital Market with Reference to Annual Dividend Announcement

The investment decision is influenced by many factors, of which one such factor is the return. The shareholders may get the return in the form of dividends which affects the share prices. The behavior of stock prices is unpredictable as price movement for different activities will move in different ways. The stock price influence activities can be divided into economic and corporate activities. The impact of economic activities will be more or less the same on all the stock prices, while the impact of corporate action varies from one stock to the other. Dividend payment is one of the essential corporate actions that will impact the behavior of stock prices. This research highlights the impact of dividend payment one the behavior of stock prices and their abnormal returns.

The Impact of Competitive Relations on the Issuers’ Dividend Policy

Purpose: The aim of the research is to analyse the impact of indicators of market position and financial stability of companies as determinants of competitiveness on dividend policy. Methodology: The research employed the methods of correlation analysis, multivariate regression, and statistical analysis. Findings: As a result of the study, two indicators characterizing dividend policy and eleven indicators were identified as determinants of companies’ competitiveness. It was established which determinants of competitiveness have a close connection and significant impact on the dividend policy. It was found that for Lenovo, P/B ratio (–0.69) has the greatest impact, Dividend Yield, variables not included in the model (0.62), Annual revenue (1.18), Net assets by year (0.93) — on Annual dividend payments. For ASUS, Total debt by year (0.88) has the greatest impact on Dividend Yield, Total liabilities (0.36) and Total debt (0.63) - on Annual dividend payments. Originality: The results indicate that ASUS actively uses debt policies in the competition for investors, while Lenovo follows a more conservative approach. The results may be useful for investors when choosing companies to invest in. Research prospects may be aimed at investigating the relationship between dividend policy and global macroeconomic phenomena.

Using a signal model for the Timing of Dividend Payment: the French case

Fixer et publier la date de paiement des dividendes est une décision très importante dans le cycle de vie de l’entreprise. À notre connaissance, peu de méthode statistique ont tenté de résoudre ce problème à travers la littérature. Cette étude contribue à la littérature sur l’évaluation de la date de paiement des dividendes à travers les modèles de signaux. Nous utilisons un modèle de signal pour confirmer si la date de paiement du dividende peut être considérée comme un signal. Nous utilisons une base de données de 168 sociétés cotées commerciales et industrielles françaises entre 2003 et 2008. Notre résultat principal est : le moment de mise en paiement du dividende est utilisé comme un signal des dirigeants aux investisseurs car cette date est proche de la date de l’assemblée générale.

Improving Customer Experience Through Differentiation Capability: The Rise of Competition Among Africa’s Consumer Goods Companies

Competitive advantage is one of the essential components of customer satisfaction and business growth, but the COVID-19 pandemic has had a substantial influence on consumer behavior, while also giving rise to intense competition within the business environment in Africa, making competitive advantage and customer experience a challenge. Consequently, firms have been compelled to make strategic choices such as differentiation capability to navigate these challenges. The study therefore examines the effect of differentiation capability on the customer experience of selected consumer goods companies listed in Nigeria the biggest economy in Africa. The research adopted a cross-sectional survey method, and a total of 20 consumer products firms were identified and evaluated based on their capitalization criteria and continuous dividend payments. From this group, seven companies were chosen for further analysis. The sample size of 378 was determined using the Research Advisor Table, with a confidence level of 95% and a margin error of 5%. To address the issue of non-response, appropriate measures were taken, leading to the inclusion of an additional 113 respondents, representing 30% of the original sample. This adjustment resulted in a final sample size of 491. A total of 491 questionnaires were sent to the respondents, resulting in a response rate of 97.76%. The hypothesis was examined by regression analysis. The results of the study indicate that differentiation capability is an effective tool that is statistically significant and positive to customer experience (β =0.842, t = 29.782, p<0.05); The research findings indicate that applying differentiation capability in a firm helps attain a stronger competitive position and has a favorable impact on customer experience. This research, therefore recommends that there is a need for technology adoption to cut production costs and establish a durable competitive advantage.

Optimal dividend policy with self-exciting claims in the Gamma–Omega model

In this paper, we consider the optimal dividend policy for an insurance company under a contagious insurance market, where the occurrence of a claim can trigger sequent claims. This clustering effect is modelled by a self-exciting Hawkes process where the intensity of claims depends on its historical path. In addition, we include the concept of bankruptcy to allow the insurance company to operate with a temporary negative surplus. The objective of the management is to obtain the optimal dividend strategy that maximises the expected discounted dividend payments until bankruptcy. The Hamilton–Jacobi–Bellman variational inequalities (HJBVIs) are derived rigorously. When claim sizes follow exponential distributions and the bankruptcy rate is a positive constant, the value function can be obtained based on the Gerber–Shiu penalty function and the optimal dividend barrier can be solved numerically. Finally, numerical examples are demonstrated to show the impact of key parameters on the optimal dividend strategy.

A Stakeholder Perspective on Indian REIT Regulations

This study examines the effectiveness of the regulatory framework of Indian real estate investment trusts (REITs). Interviews were conducted with 30 industry experts using semi-structured questionnaires. The feedback from the interviews was systematically analyzed using content analysis. The original data were categorized into first-level codes and zero-order codes, and further, these codes were used to identify overarching themes. The results indicate that India’s existing REIT model is functional and similar to comparable countries, such as the United Kingdom, France, Ireland, and China. However, there is a scope for improvement. To attract retail investors, it is suggested that tax regulations of REITs should be simplified, with a specific focus on the bifurcation of interest and dividend payments to the investors. The results also suggest that the interest received as loan repayment should be deducted from the initial acquisition cost to reduce the investor’s capital gain. The study recommends the integration of REITs into the Realty Index to increase investors’ confidence. It also suggests revising the treatment of security deposits from the Net Distributable Cash Flow (NDCF), as it is not a direct income of the REIT. These suggestions contribute to filling the gap in the existing literature on Indian REITs. It also offers practical suggestions for policymakers to improve regulatory frameworks and improve investors’ confidence.

Industry Effects in the Dividend Initiation Decision

We examine industry effects on the likelihood and level of dividend initiations. Results suggest that firms incorporate industry expectations for dividend levels and growth into the initiation decision. They are in general less likely to initiate a dividend if dividend levels in the industry are high or growing. Firms that do initiate seek to match industry peers in initiation levels. We also find that announcement returns to dividend initiating firms are lower when more industry peers are dividend payers and when industry dividend growth is high. Together, these results provide support for an industry equilibrium dividend policy.

Pengaruh Volume Penjualan Saham, Profitabilitas, Solvabilitas, Earning Volatility dan Tranding Volume terhadap Volatilitas Harga Saham dengan Kebijakan Deviden sebagai Variabel Mediasi

This research aims to determine the effect of share sales volume, profitability, solvency, earnings volatility and trading volume on share price volatility with dividend policy as a mediating variable in food and beverage companies listed on the Indonesia Stock Exchange for the 2017-2021 period. The sample for this research consisted of 55 companies, using a purposive sampling method with the criteria stating dividend payments for 5 consecutive years. The research results show that debt ratio, return on assets, trading volume have an influence on stock price volatility. However, earnings volatility and share sales volume have no effect on share price volatility. Dividend policy is able to mediate share sales volume on stock price volatility, dividend policy is able to mediate profitability on stock price volatility, dividend policy is able to mediate solvency on stock price volatility, dividend policy is able to mediate earnings volatility on stock price volatility and dividend policy is able to mediate volume trending on stock price volatility in food and beverage companies listed on the Indonesia Stock Exchange for the 2017-2021 period.