Dividend policy and stock price volatility of industrial products firms in Malaysia

2018 ◽  
Vol 13 (1) ◽  
pp. 203-217 ◽  
Author(s):  
Rozaimah Zainudin ◽  
Nurul Shahnaz Mahdzan ◽  
Chee Hong Yet
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Price Volatility ◽  
Industrial Products ◽  
Stock Price Volatility ◽  
Dividend Payout ◽  
Content Type ◽  
Crisis Period ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to analyse the relationship between stock price volatility (SPV) and dividend policy of industrial products firms listed on Bursa Malaysia. Design/methodology/approach The sample comprises 166 industrial products public-listed firms covering a time span from year 2003 to 2012. Using Baskin’s framework, firm’s SPV is related to dividend payout, controlling for earnings volatility, firm size, leverage and growth of assets. Further, the impact of the global financial crisis on the relationship between SPV and the tested variables is examined. Findings Earning volatility significantly explains SPV of industrial product firms during the crisis period, while dividend payout ratio (PR) predominantly influences volatility during pre- and post-crisis sub-periods. The empirical results indicate that dividend policy is a strong predictor of SPV of industrial products firms in Malaysia, particularly during the post-crisis period. Originality/value The paper explores the firm’s SPV and dividend policy for a new set of data focussing on industrial products firms listed on the Malaysian Stock Exchange.

scholarly journals The impacts of IPO financing and monetary policy on economic growth in Bangladesh: Evidence from a dynamic assessment

2021 ◽  
Vol 1 (1) ◽  
Author(s):  
Sagira Sultana Provaty
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Service Industry ◽  
Dynamic Assessment ◽  
Price Volatility ◽  
Dividend Yield ◽  
Stock Price Volatility ◽  
Independent Variables ◽  
The Impact ◽  
The Relationship

The impact of dividend policy on stock price volatility is one of the most researched topics of corporate finance. This study investigates the relationship between stock price volatility and dividend policy among Bangladeshi financial service industry companies. Two key variables - dividend yield and dividend payout have been taken as the independent variables after controlling for firm size, asset growth, earnings volatility, long-term debt, and earnings per share. The stock price volatility has been taken as the dependent variable. Panel regression analysis is employed to explore the relationship of dependent with independent variables. Results reveal a significant positive relationship between stock price volatility and dividend yield among companies considered in this study. This study will help regulators and investors understand how the stock price fluctuates in response to financial information such as dividend announcements

scholarly journals The Impact of Dividend Policy on the Relationship Between Institutional Ownership and Stock Price Volatility: Evidence from Pakistan

2013 ◽  
Vol 2 (1) ◽  
pp. 111-132
Author(s):  
Atif Hussain
Keyword(s):  
Stock Price ◽  
Fixed Effects ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Price Volatility ◽  
Institutional Ownership ◽  
Fixed Effects Model ◽  
Stock Price Volatility ◽  
The Impact ◽  
The Relationship

This study aims to determine the effects of dividend policy on the relationship between institutional ownership and stock price volatility, based on a sample of 36 firms listed on the Karachi Stock Exchange over a seven-year period (2005–11). We use a fixed-effects model applied to panel data to investigate this relationship and find that institutional ownership has a negative relation with stock price volatility and a positive relation with the dividend payout ratio. The results also show that dividend payouts significantly affect the relationship between institutional ownership and stock price volatility. The mediating role of dividend policy between institutional ownership and stock price volatility reveals that institutional investors prefer to invest in low-volatility dividend-paying stock.

scholarly journals A systematic review of dividend policy in relation to stock price volatility

2021 ◽  
Vol 6 (1) ◽  
pp. 92-104
Author(s):  
Sheena Bhatta ◽  
Bal Ram Duwal
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Price Volatility ◽  
Manufacturing Companies ◽  
Dividend Yield ◽  
Stock Price Volatility ◽  
Dividend Payout ◽  
The Impact

When it comes to determining a dividend policy that would maximize shareholder value, focusing merely on how much of the firm’s profit is necessary for dividend distribution and reinvestment is insufficient. It is critical to analyze the impact of their dividend choice on the stock price.The purpose of this study is to scrutinize the impact of dividend policy on stock price volatility. The report investigated the relationship between the dividend policy and stock price volatility taking 8 articles between 2010 to 2020. Likewise, following a systematic literature review method, the study critically analyzed the selected articles based on their strengths and weaknesses. The findings suggest that, in most of the cases demonstrated by authors, dividend policy has a significant negative relationship with the stock price volatility. The stock’s price volatility often decreases after the declaration of dividend payout ratio and dividend yield. Based on the results of this study, it can be implied that, managers of manufacturing companies and banks, those listed in the stock exchange, may be able to reduce the price volatility of their stock by increasing dividend payout and dividend yield. Since the study is limited to 4 databases, further studies could include some more articles from top-rated databases that signify dividend policy in diverse sectors to derive even more accurate results.

scholarly journals The accounting numbers and investment decisions in emerging markets

2015 ◽  
Vol 12 (2) ◽  
pp. 443-454
Author(s):  
Husni K. Al-Shattarat
Keyword(s):  
Transaction Costs ◽  
Stock Price ◽  
Dividend Policy ◽  
Price Volatility ◽  
University Education ◽  
Share Price ◽  
Dividend Yield ◽  
Stock Price Volatility ◽  
The Impact ◽  
The Relationship

The main objective of this study is to determine the impact of dividend policy on stock price in Kuwait Firms. the study adopts the quantitative technique, gathering data from official listed Kuwaiti companies. All non-financial firms listed in Kuwait Stock Exchange from 1994 to 2003 This study will be based on a cross-sectional regression analysis of the relationship between stock price volatility and dividend policy after controlling for firm size, earning volatility, leverage and asset growth. Both dividend policy measures (dividend yield and payout ratio) have significant impact on the share price volatility.and examines the influence of dividend policy on stock price volatility and suggests the use of the following control variables in testing the significance of the relationship between dividend yield and price volatility: operating earnings; size of the firm; level of debt financing; payout ratio; and level of growth. These variables have a clear impact on stock returns but also impact on dividend yield. ‘SPSS’ statistical package to run statistical tests and answer study questions. Basic descriptive statistics (Mean, Standard Deviations) and frequency distribution were computed for each variable/question. Ordinary Least Squares (OLS) coefficient estimates are used in this study. F-tests are used to test for the relationship between stock price volatility and dividend policy. The results show that preference for dividends is larger amongst older investors, compared to younger investors. Old investors and investors without university education all have a preference for dividends because of transaction costs. On the other hand, young investors and investors with a university education have less interest in dividends based on transaction costs. The results also suggest that the watch for dividends as a safeguard measure is still “old-fashioned”, even in light of the recent accounting scandals.The results also indicate that individual investors believe that dividend payments contain a signal about the profitability of the firm

scholarly journals FAKTOR YANG MEMPENGARUHI VOLATILITAS HARGA SAHAM PADA EMITEN YANG TERDAFTAR DI JAKARTA ISLAMIC INDEX

2021 ◽  
Vol 8 (6) ◽  
pp. 706
Author(s):  
Nurul Hidayati ◽  
Puji Sucia Sukmaningrum
Keyword(s):  
Stock Price ◽  
Trading Volume ◽  
Dividend Policy ◽  
Price Volatility ◽  
Share Price ◽  
Company Size ◽  
Stock Price Volatility ◽  
Dividend Payout ◽  
Earnings Volatility ◽  
Panel Data Regression

ABSTRAKTujuan dari penelitian ini yaitu meneliti pengaruh kebijakan dividen, volume perdagangan, volatilitas laba, ukuran perusahaan dan tingkat hutang terhadap volatilitas harga saham di emiten yang terdaftar di JII dari tahun 2015 sampai 2019. Adapun manfaat dari penelitian ini dalam eksistensi pasar finansial secara global karena dapat mengukur tingkat risiko. Penelitian ini dibantu dengan alat analisis Eviews 10. Regresi data panel dipilih dalam penelitian ini. Hasil penelitian membuktikan bahwa secara individual dividend payout ratio, volume perdagangan dan volatilitas laba secara positif memiliki pengaruh yang signifikan, ukuran perusahaan secara negatif memiliki pengaruh signifikan, dan tingkat hutang tidak memiliki pengaruh signifikan terhadap volatilitas harga saham. Secara simultan, variabel dividend payout ratio, volume perdagangan, ukuran perusahaan, volatilitas laba, dan tingkat hutang signifikan berpengaruh terhadap volatilitas harga saham. Kata Kunci: Volatilitas harga saham, emiten syariah, regresi data panel. ABSTRACTThe purpose of this study is to examine the effect of dividend policy, trading volume, earnings volatility, company size and level of debt on stock price volatility in issuers listed in JII from 2015 to 2019. The benefits of this research are in the existence of global financial markets because it can measure the level of risk. This research is assisted by the analysis tool Eviews 10. Panel data regression. selected in this study. The results showed that partially the dividend payout ratio, trading volume and earnings volatility had a positive and significant effect, company size had a negative and significant effect, and the level of debt had no significant effect on stock price volatility. Simultaneously, the variable dividend payout ratio, trading volume, company size, earnings volatility, and level of debt have a significant effect on stock price volatility. Keywords: Stock price volatility, sharia company, panel data regression. DAFTAR PUSTAKABawono, A., & Shina, A. F. I. (2018). Ekonometrika terapan untuk ekonomi dan bisnis Islam aplikasi dengan Eviews. Salatiga: Lembaga Penelitian dan Pengabdian kepada Masyarakat (LP2M) IAIN Salatiga Press.Brigham, E. F., & Houston, J. F. (2011). Dasar-dasar manajemen keuangan, buku kedua. Jakarta: Salemba Empat.Camilleri, S. J., Grima, L., & Grima, S. (2019). The effect of dividend policy on share price volatility: an analysis of Mediterranean banks’ stocks. Managerial Finance, 45(2), 348–364. https://doi.org/10.1108/MF-11-2017-0451Dewi, S., & Paramita, R. A. S. (2019). Pengaruh kebijakan dividen, volume perdagangan, earning volatility, leverage, dan firm size terhadap volatilitas harga saham perusahaan LQ45. Jurnal Ilmu Manajemen, 7(3), 761–771.Fakhruddin, H. M. (2008). Istilah pasar modal A-Z. Jakarta: Elex Media Komputindo.Gumanti, T. A. (2013). Kebijakan Dividen (Pertama). UPP STIM YKPN.Jahfer, A., & Mulafara, A. H. (2016). Dividend policy and share price volatility: Evidence from Colombo stock market. Internaltional Journal Managerial and Financial Accounting, 8(2), 97–108. DOI:10.1504/IJMFA.2016.077947Jannah, R., & Haridhi, M. (2016). Pengaruh kebijakan dividen, earning volatility, dan leverage terhadap volatilitas harga saham pada perusahaan non-financing yang terdaftar di bursa efek Indonesia tahun 2010-2014. Jurnal Ilmiah Mahasiswa Ekonomi Akuntansi, 1(1), 133–148.Mehmood, A., Ullah, M. H., & Ul Sabeeh, N. (2019). Determinants of stock price volatility: Evidence from cement industry. Accounting, 5(4), 145–152. https://doi.org/10.5267/j.ac.2019.2.002Muhamad. (2016). Manajemen keuangan syari’ah analisis fiqh & keuangan. Yogyakarta: UPP STIM YKPN.Novius, A. (2017). Analisis pengaruh kebijakan deviden ( Dividen payout ratio dan devidend yield) terhadap volatilitas harga saham (Studi empiris pada perusahaan kelompok LQ45 yang terdaftar di BEI). Jurnal Al-Iqtishad, 13(1), 67. https://doi.org/10.24014/jiq.v13i1.4389Rowena, J., & Hendra. (2017). Earnings volatility, kebijakan dividen, dan pertumbuhan asset berpengaruh terhadap volatilitas harga saham pada perusahaan manufaktur di BEI periode 2013 – 2015. Jurnal Administrasi Kantor, 5(2), 231–242.Sarmanu. (2017). Dasar metodologi penelitian. Surabaya: Airlangga University Press.Septyadi, M. A., & Bwarleling, T. H. (2020). Pengaruh volume perdagangan saham, leverage, dan kebijakan dividen terhadap volatilitas harga saham, 2, 149–162.Shah, S. A., & Noreen, U. (2016). Stock price volatility and role of dividend policy: Empirical evidence from Pakistan. International Journal of Economics and Financial Issues, 6(2), 461–472.Spence. (1973). Job market signaling. The Quarterly Journal of Economics, 87(3), 355–374. https://doi.org/10.2307/1882010Tandelilin, E. (2010). Manajemen portofolio dan investasi. Surabaya: Kanisius.Yulinda, E., Pujiastuti, T., & Haryono, S. (2020). Analisis pengaruh dividend payout ratio, leverage, firm size, volume perdagangan, earning volatility, dan inflasi terhadap volatilitas harga saham pada perusahaan yang terdaftar dalam indeks LQ45 tahun 2014-2017. Jurnal Ilmiah Indonesia Ilmiah Indonesia, 5(5), 76. DOI:10.36418/syntax-literate.v5i5.1106Zainudin, R., Mahdzan, N. S., & Yet, C. H. (2018). Dividend policy and stock price volatility of industrial products firms in Malaysia. International Journal of Emerging Markets, 13(1), 203–217. https://doi.org/10.1108/IJoEM-09-2016-0250

Stock price synchronicity and dividend policy: evidence from an emerging market

2019 ◽  
Vol 32 (4) ◽  
pp. 627-641
Author(s):  
Omar Farooq ◽  
Mona A. ElBannan
Keyword(s):  
Stock Price ◽  
Negative Impact ◽  
Emerging Market ◽  
Information Asymmetries ◽  
Stock Price Synchronicity ◽  
Dividend Payout ◽  
Content Type ◽  
Regression Approach ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to document the impact of stock price synchronicity (SYNCH) on the dividend payout ratio. Design/methodology/approach The authors use data from India for the period between 2000 and 2012 and the panel regression approach to test their arguments. Findings This paper documents that the relationship between synchronicity and dividend payout ratio is positive until a turning point is reached. After that point, synchronicity has a negative impact on dividend payout ratio. The authors argue that firms with low synchronicity have higher information asymmetries. As a result, they have an incentive to develop a reputation as better-governed firms by paying high dividends. However, as synchronicity increases further, information asymmetries go down and as a result incentive to use dividend payouts as a mechanism to reduce information asymmetries goes down. Therefore, positive relationship between synchronicity and dividend payout ratios breaks down at high levels of synchronicity. Originality/value The authors provide evidence regarding the role played by SYNCH – a publicly available measure – on dividend polices adopted by firms within the context of emerging markets.

scholarly journals Influence of dividend policy on sharia stock price volatility

2020 ◽  
Vol 9 (7) ◽  
pp. 84-92
Author(s):  
Irton Irton
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Hypothesis Test ◽  
Price Volatility ◽  
Secondary Data ◽  
Stock Index ◽  
Dividend Yield ◽  
Stock Price Volatility ◽  
Dividend Payout

The main object of this research is to examine whether dividend policy in the form of dividend payout ratio and dividend yield influences the volatility of sharia stock price in the Indonesian Stock Exchange. This research uses the quantitative method by using the secondary data collected from the published Indonesian Stock Exchange. The sample in this research is 106 companies registered in the Indonesian Sharia Stock Index (ISSI) in 2016-2018. The dependent variable in this research is stock price volatility while the independent variables are dividend payout ratio, dividend yield, and data of earnings volatility, debt, and size that are collected and processed from the company financial report. Multiplied regression analysis is used for correlation test and hypothesis test using the SPSS software program version 15.0. The result of the research shows a shred of evidence that dividend per share and dividend payout ratio have no influence on the stock price volatility. The result of research can help the investors to select the sharia shares, and for companies, this research is useful to determine the dividend policy

Impact of Dividend Policy on Stock Price Volatility: An Empirical Study on Financial Service Industry of Bangladesh

2021 ◽  
Vol 1 (1) ◽  
Author(s):  
Sagira Sultana Provaty ◽  
◽  
Khairul Alam Siddique
Keyword(s):  
Stock Price ◽  
Dividend Policy ◽  
Service Industry ◽  
Price Volatility ◽  
Financial Service ◽  
Dividend Yield ◽  
Stock Price Volatility ◽  
Independent Variables ◽  
Financial Service Industry ◽  
The Relationship

The impact of dividend policy on stock price volatility is one of the most researched topics of corporate finance. This study investigates the relationship between stock price volatility and dividend policy among Bangladeshi financial service industry companies. Two key variables - dividend yield and dividend payout have been taken as the independent variables after controlling for firm size, asset growth, earnings volatility, long-term debt, and earnings per share. The stock price volatility has been taken as the dependent variable. Panel regression analysis is employed to explore the relationship of dependent with independent variables. Results reveal a significant positive relationship between stock price volatility and dividend yield among companies considered in this study. This study will help regulators and investors understand how the stock price fluctuates in response to financial information such as dividend announcements.

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