scholarly journals Do We Need a Regulation on Dividends for Indonesia Stock Exchange?

2018 ◽  
Vol 20 (1) ◽  
pp. 33 ◽  
Author(s):  
Leo Indra Wardhana ◽  
Eduardus Tandelilin
Keyword(s):  
Life Cycle ◽  
Stock Exchange ◽  
Life Cycles ◽  
Listed Firms ◽  
Financial Firms ◽  
Dividend Payments ◽  
Life Cycle Hypothesis ◽  
Recent Idea

This study examines the dividend life-cycle hypothesis and the propensity of non-financial firms listed on the Indonesia Stock Exchange (IDX) to pay dividends, in light of a recent idea by the IDX to regulate dividend payments. Using several proxies of the life cycle, the results consistently show that Indonesian listed firms follow the dividend life-cycle hypothesis. Our results recommend that if the authority insists on regulating dividend payments, the regulation should take into account the firms’ life cycles. Firms should only be required to pay dividends when they reach a certain stage and/or meet defined characteristics, according to their stage or characteristics.

How Moroccan institutional investors view dividend policy

2017 ◽  
Vol 43 (12) ◽  
pp. 1332-1347 ◽  
Author(s):  
H. Kent Baker ◽  
Imad Jabbouri
Keyword(s):  
Institutional Investors ◽  
Stock Prices ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Mail Survey ◽  
High Response Rate ◽  
Content Type ◽  
Listed Firms ◽  
Dividend Policies ◽  
Dividend Payments

Purpose The purpose of this paper is to examine how Moroccan institutional investors view dividend policy. It discusses the importance these investors attach to the dividend policy of their investee firms, how much influence they exercise in shaping investee firms’ dividend policies, their reactions to changes in dividends, and their views on various explanations for paying dividends. Design/methodology/approach A mail survey provides a respondent and firm profile and responses to 28 questions involving various explanations for paying dividends and 30 questions on different dividend issues. Findings Institutional investors attach substantial importance to dividend policy and prefer high dividend payments. Although liquidity needs are a major driver, taxes play little role in shaping dividend preferences. Respondents agree with multiple explanations for paying dividends giving the strongest support to catering, bird-in-the-hand, life cycle, signaling, and agency theories. Research limitations/implications Despite a high response rate, the number of respondents limits partitioning the sample and testing for significant differences between different groups. Practical implications The lack of communication between Casablanca Stock Exchange (CSE) listed firms and institutional investors may depress stock prices and increase volatility. The results suggest agency problems and a weak governance environment at the CSE. Originality/value This study documents the importance that institutional investors place on dividend policy, their reactions to changes in their investees’ dividend policy, and the methods used to influence these firms. It extends previous research by reporting the level of support Moroccan institutional investors give to various explanations for paying dividends.

Financial flexibility, managerial efficiency and firm life cycle on firm performance

2019 ◽  
Vol 16 (2) ◽  
pp. 168-180
Author(s):  
Heng-Yu Chang ◽  
Chun-Ai Ma
Keyword(s):  
Life Cycle ◽  
Firm Performance ◽  
Stock Market ◽  
Life Cycles ◽  
Mature Stage ◽  
Chinese Stock Market ◽  
Financial Flexibility ◽  
Content Type ◽  
Listed Firms ◽  
Managerial Efficiency

Purpose As the capital market in China is still developing, several constraints on a Chinese-listed firm’s financing strategy have a direct impact on its financial flexibility. The purpose of this paper is to reconstruct traditional financial flexibility index (FFI) derived from the western context, provide empirical evidence within eastern context by modified FFI and examine how the managerial efficiency of Chinese-listed firms is demonstrated with modified FFI to escort corporate life cycle hypothesis. Design/methodology/approach By tailored FFI to fit the contemporary operations of Chinese-listed firms, this study investigates how managerial efficiency varies across different life stages to demonstrate the moderating power in the firm performance of financially flexible firm. Findings It is found that financially flexible firms in the Chinese stock market generally experience good firm performance, yet the managerial efficiency could gradually be diminishing at their mature stage even firms’ financial flexibility remains consistent with the agency theory. This paper sheds light on the necessity to reexamine the components in financial flexibility based on the eastern context, and provides avenue to further understand the managerial behavior of Chinese listed firms when considering firm life cycles. Research limitations/implications Although it is difficult for this current study to offer the precise weights on each factor in calculating financial flexibility, the judgment matrix method is adopted to at least provide reliable estimates in accordance with Chinese business contexts with less than 10 percent errors in contrast to the actual weights. Practical implications This modified FFI is particularly suitable for Chinese-listed firms under certain unique financial reporting regulations by adjusting a number of weights and factors. This study may help practitioners understand the managerial conduct of publicly listed firms in China. Originality/value The paper constructs a modified FFI with Chinese stock market characteristics embedded, and provides insightful evidence to explain the new pecking order theory by considering the life cycle stage of Chinese-listed companies.

Effects of Working Capital Management on Profitability: A Case of Nepalese Manufacturing Firms

2021 ◽  
Vol 5 (1) ◽  
pp. 130-147
Author(s):  
Phadindra Kumar Poudel ◽  
Pujan Maharjan
Keyword(s):  
Significant Relationship ◽  
Stock Exchange ◽  
Capital Management ◽  
Working Capital ◽  
Current Ratio ◽  
Cross Sectional ◽  
Working Capital Management ◽  
Listed Firms ◽  
Financial Firms ◽  
Cash Conversion Cycle

The study deals with the relationship between firm characteristics of working capital management and firm profitability in Nepal. It examines if firm performance, return on assets is related to cash conversion cycle, days’ sales outstanding, days’ inventory outstanding and current ratio. The study is based on pooled cross-sectional data of 10 non-financial firms from 2071/72 to 2075/76 of listed firms in the Nepal Stock Exchange. The study employed descriptive and causal-comparative research design to attainthe purpose of this study. The result reveals that the current ratio has a positively significant relationship with profitability and days’ sale outstanding has negatively significant relationship with the financial performance of the firm.

The effects of audit quality on the costs of capital of firms in Ghana

2018 ◽  
Vol 16 (4) ◽  
pp. 639-659 ◽  
Author(s):  
William Coffie ◽  
Ibrahim Bedi ◽  
Mohammed Amidu
Keyword(s):  
Audit Quality ◽  
Cost Of Capital ◽  
Stock Exchange ◽  
Low Cost ◽  
Cost Of Debt ◽  
Future Research ◽  
Content Type ◽  
Listed Firms ◽  
Financial Firms ◽  
The Cost

PurposeThis paper aims to investigate the effects of audit quality on the cost of capital in Ghana.Design/methodology/approachNon-financial firms listed on the Ghana Stock Exchange (GSE) as well as non-listed firms from the database of Ghana Club 100 were included in the sample. Series are yearly, covering a sample of 40 firms during the six-year period, 2008-2013. The study employed the positivist research paradigm to establish the relationship between audit quality and the cost of capital.FindingsThere is evidence to suggest that the cost of debt and the overall cost of capital of firms in Ghana can be explained by the quality of the external auditors. The results also show that the large size of the board is associated with low cost of debt.Research limitations/implicationsThe fact that the choice of quality measure is based on firm size only and other measurements of audit quality could not be measured. Future research may examine how other approaches to measuring audit quality affect cost of capital.Practical implicationsThe results significant for those charged with assurance and regulation, as well as lenders and managers of companies.Originality/valueThe authors investigate how external auditing quality affects the cost of capital of firms operating in Ghana.

Dynamic Model of Optimal Capital Structure: Evidence from Nigerian Listed Firms

2017 ◽  
Vol 18 (3) ◽  
pp. 590-604 ◽  
Author(s):  
Rubi Ahmad ◽  
Oyebola Fatima Etudaiye-Muhtar
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Adjustment Costs ◽  
Dynamic Adjustment ◽  
Listed Firms ◽  
Optimal Capital Structure ◽  
Developed Economies ◽  
Tax Shield ◽  
Financial Firms ◽  
Optimal Capital

Examination of optimal capital structure in financial markets with imperfections suggests that when deviations from optimal capital structure occur, adjustment costs may prevent firms from moving towards target capital structure. However, previous studies on the capital structure of non-financial firms in Nigeria did not consider these imperfections and adjustment costs. It is against this background that this study investigates the dynamic adjustment to target capital structure by non-financial firms listed on the Nigerian Stock Exchange. By utilizing a framework that provides for the determination of adjustment costs, the results reveal the existence of dynamic adjustment to optimal capital structure suggesting attempts made by the sampled firms to maximize shareholders wealth. A comparison of the adjustment costs with those of firms in more developed economies shows that Nigerian firms have higher costs of adjustment indicating that the level of development of the market is important in lowering transaction costs. In addition, tangibility of assets, non-debt tax shield, growth opportunity, firm size, profitability and inflation significantly influence Nigerian firms’ optimal capital structure.

scholarly journals Determinants of Capital Structure in Pakistani Listed Firms (The Case of Pakistani Listed Firms)

2021 ◽  
Vol 6 (3) ◽  
Author(s):  
Khan S ◽  
◽  
Ullah S ◽  
ur Rehman I ◽  
Sami I ◽  
...  
Keyword(s):  
Stock Exchange ◽  
Order Theory ◽  
Insurance Companies ◽  
Pecking Order ◽  
Pecking Order Theory ◽  
Leverage Ratio ◽  
Listed Firms ◽  
Financial Firms ◽  
Investment Companies ◽  
Size Growth

The sample data was comprised of non-financial firms listed on Karachi Stock Exchange, Pakistan from 1993 to 2002 excluding banks, insurance companies, and investment companies. We were taken the debt to total assets ratio as a proxy for leverage (dependent variable) that was measured following ways mentioned in previous studies (Jensen (1986), Harris and Revive (1990) and Banerjee, et al., 2000). For potential determinants of leverage, we study four independent variables namely tangibility, size, growth and profitability. Variables affecting leverage ratio were calculated by dividing the total debt by total assets and 3-variables were significantly related to leverage ratio whereas the remaining variables were not statistically significant in having relationship with the debt ratio. Our results showed that tangibility variable confirms tradeoff theory, Growth (GT) variable confirms the agency theory hypothesis and Profitability (PF) confirms the predictions of pecking order theory.

MODEL KEBIJAKAN DIVIDEN BERDASARKAN SIKLUS HIDUP PERUSAHAAN: STUDI EMPIRIS DI INDONESIA

2018 ◽  
Vol 3 (2) ◽  
pp. 263
Author(s):  
Irdha Yusra ◽  
Lisa Amelia Herman ◽  
Nova Begawati
Keyword(s):  
Life Cycle ◽  
Stock Exchange ◽  
Tobit Regression ◽  
Firm Level ◽  
Life Cycle Theory ◽  
Dividend Payments ◽  
Investment Opportunities ◽  
Research Findings ◽  
Research Objects ◽  
Retained Earnings

<p><em>In the life cycle theory of the company, it is stated that the Company which is at the established stage has the ability to make money beyond its ability to find profitable investment opportunities. The Company will distribute cash flow optimally to stakeholders in the form of dividend payments. The purpose of this study is to examine the effect of retained earnings ratio (proxied with retained earnings to total equity) on the probability and rate of dividend payments based on the life cycle of the firm. Companies listed on the Indonesia Stock Exchange period 2012 - 2016 are designated as research objects. Meanwhile, the sample is selected using criteria considered by the researcher (judgment sampling). Hypothesis testing is done by using the statistical method that is probit and tobit regression. The research findings show that retained earnings have a positive and significant effect on the probability and rate of dividend payments. However, the results of the study do not show significant evidence that retained earnings have a stronger effect on the probability and firm level of paying dividends.</em></p><p> </p><p>Dalam teori siklus hidup perusahaan dinyatakan bahwa Perusahaan yang berada pada tahap mapan memiliki kemampuan dalam menghasilkan uang melebihi kemampuannya dalam menemukan peluang investasi yang menguntungkan. Perusahaan tersebut akan mendistribusikan aliran kas secara optimal kepada stakeholders berupa pembayaran dividen. Tujuan penelitian ini adalah untuk menguji pengaruh rasio laba ditahan (diprosi dengan retained earnings to total equity) terhadap probabilitas dan tingkat pembayaran dividen berdasarkan siklus hidup perusahaan. Perusahaan yang listed di Bursa Efek Indonesia periode 2012 – 2016 ditetapkan sebagai objek penelitian. Sedangkan, sampel dipilih menggunakan criteria-kriteria yang dipertimbangkan oleh peneliti (judgment sampling). Pengujian hipotesis dilakukan dengan menggunakan metode statistik yaitu regresi probit dan tobit. Hasil penelitian kamimenunjukkan bahwa laba ditahan berpengaruh positif dan signifikan terhadap probabilitas dan tingkat pembayaran dividen. Namun, hasil penelitian tidak memberikan bukti yang signifikan bahwa laba ditahan berpengaruh lebih kuat terhadap probabilitas dan tingkat perusahaan mapan membayar dividen.</p>

scholarly journals Impact of Elimination of Dividend Distribution Tax on Indian Corporate Firms amid COVID Disruptions

2021 ◽  
Vol 14 (9) ◽  
pp. 413
Author(s):  
Anshu Agrawal
Keyword(s):  
Financial Performance ◽  
Stock Exchange ◽  
Cash Flows ◽  
Market Capitalization ◽  
Factors Associated ◽  
Financial Firms ◽  
Dividend Payments ◽  
Dividend Distribution ◽  
Free Cash Flows ◽  
The Impact

Economic fallouts from COVID-19 have been unprecedented across all industries, with a handful of exceptions. The present study attempts to capture the impact of dividend distribution tax elimination, introduced through the Indian Finance Act 2020, on corporate dividend behavior in India. It explores the determinants of dividend payouts, changing payout decisions, dividend behavior of regular payers, and the prevalence of factors associated with changing payouts. Out of the top 1000 firms, based on their market capitalization at the Bombay Stock Exchange, 509 non-financial firms pursuing consistent dividend payments from 2015 to 2019 are analyzed. The study also examines the dividend behavior of regular payers exhibiting a stable or step-up payout from 2015 to 2019. COVID’s impact on the firm’s financial performance and sentiments seems to dominate, suppressing investors’ expectations of enhanced payouts associated with dividend distribution tax advantages, with considerable reductions in payouts and omissions shown by regular and irregular payers in 2020 and 2021 vis-à-vis the preceding years. The findings signify that the dividend payouts of sample firms are positively associated with the firms’ size, MBV ratio, and past dividends, and negatively allied with free cash flows and the EBITDA margin. Regular payers are observed to be more sensitive to past dividends. The study lends credence to the conservatism and prevalence of signaling and catering theories in the dividend behavior of Indian corporate firms.

scholarly journals Ownership Concentration and Going Concern: Evidence from Jordanian Listed Firms

2018 ◽  
Vol 13 (9) ◽  
pp. 139
Author(s):  
Mohammed Hassan Makhlouf ◽  
Fares Jamiel Al-Sufy
Keyword(s):  
Stock Exchange ◽  
Ownership Concentration ◽  
Family Ownership ◽  
Data Set ◽  
Listed Firms ◽  
Going Concern ◽  
Financial Firms ◽  
The Family ◽  
Z Scores ◽  
Ownership Types

This study aims to investigate whether ownership concentration affects the going concern. The study depends on a panel data set drawn from 100 non-financial firms listed on the Amman Stock Exchange (ASE) for the period from 2013 to 2016. Ownership concentration was characterized by family ownership and board of directors' ownership. Going concern was measured using Altman’s Z-Scores Model (1968). The outcomes report that the family ownership and directors' ownership are positively associated with going concern. This study presents worthy insights to the understanding of ownership types that may influence going concern evaluation among Jordanian companies. Thus, the results of this article introduce substantial conclusions for investors, policymakers and academics to shed the light on the ownership types that enhance the continuity of firms.

scholarly journals Firm Life Cycle and Investment Inefficiency

2020 ◽  
Vol 3 (2) ◽  
pp. 169-184
Author(s):  
Amelia Graciosa ◽  
Gracia Gracia ◽  
Rita Juliana
Keyword(s):  
Life Cycle ◽  
Cash Flow ◽  
Stock Exchange ◽  
Life Cycles ◽  
Free Cash Flow ◽  
Maturity Stage ◽  
Investment Performance ◽  
Life Cycle Stages ◽  
The Government ◽  
Firm’S Life Cycle

This paper investigates whether the firm's life cycle stages carry out free cash flow efficiently or not before their investment performance. We utilize cash flow patterns to classify firms into five several life cycles stages. Our data consists of non-financial firms listed in Indonesia Stock Exchange from 2008-2018. We find evidence that Indonesian firms in the introduction, growth, and shakeout stage are underinvesting. This paper also shows that firms in decline stage are overinvested. The characteristic of the mature firm includes that firms with high cash flow will tend to overinvest. However, contrasting with mature firms' common characteristics, our results show that Indonesian firms in maturity stage tend to underinvest. The results also imply that the government should acknowledge the existence of Indonesian firms' investment inefficiency problem. Overall, this paper contributes to the literature by providing empirical evidence on Indonesia's investment inefficiency phenomena. It is suggested that further research may select a different method in calculating growth opportunities and may also study private firms since it tends to have higher financial constraints.

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