Determinants of dividend policy of South Korean listed firms

2021 ◽  
Vol 13 (2) ◽  
pp. 107-118
Author(s):  
ARINDAM BANERJEE
Keyword(s):  
Dividend Policy ◽  
Stock Exchange ◽  
Payout Policy ◽  
The South ◽  
Dividend Payout ◽  
Listed Firms ◽  
South Korean ◽  
Effect Regression ◽  
Specific Factors ◽  
The Many

Dividend policy continues to be a much debated research topic ever since the seminal works of John Lintner (1956), and Miller and Modigliani (1961). Among the many answered questions, doubt continues to remain on the specific factors that determine dividend policy and whether dividend policy can be structured dependently or independently. The aim of this study is to investigate the determinants of dividend payout policy on the South Korean firms listed on the South Korean Stock Exchange (KRX). In this study, five variables are considered as potential determinants of dividend payout policy. The study develops five research hypotheses, which are used to represent the main theories of corporate dividend payouts. Fixed effect regression model was applied on a sample of thirty listed companies on South Korean Stock Exchange for the period of four years from 2014 to 2017. The model was chosen to test the relationship between dividend determinants and dividend payout policy. The study hopes to potentially increase knowledge in the area of dividend payout policy with a view to improve prediction and establish a relationship between dividend determinants and dividend payout of South Korean firms.

The impact of board composition and ownership structure on dividend payout policy: evidence from Saudi Arabia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Helmi A. Boshnak
Keyword(s):  
Saudi Arabia ◽  
Ownership Structure ◽  
Dividend Policy ◽  
Payout Policy ◽  
Board Composition ◽  
Dividend Payout ◽  
Content Type ◽  
Listed Firms ◽  
Propensity To Pay ◽  
The Impact

PurposeThis study examines the impact of board composition and ownership structure variables on dividend payout policy in Saudi Arabian firms. In particular, it aims to determine the effect of board size, independence and meeting frequency, in addition to chief executive officer (CEO) duality, and state, institutional, managerial, family, and foreign ownership on both the propensity to pay dividends and dividend per share for Saudi-listed firms over the period 2016–2019.Design/methodology/approachThe paper captures dividend policy with two measures, propensity to pay dividends and dividend per share, and employs a range of regression methods (logistic, probit, ordinary least squares (OLS) and random effects regressions) along with a two-stage least squares (2SLS) model for robustness to account for heteroscedasticity, serial correlation and endogeneity issues. The data set is a large panel of 280 Saudi-listed firms over the period 2016 to 2019.FindingsThe results underline the importance of board composition and the ownership structure in explaining variations in dividend policy across Saudi firms. More specifically, there is a positive relationship between the propensity to pay dividends and board-meeting frequency, institutional ownership, firm profitability and firm age, while the degree of board independence, firm size and leverage exhibit a negative relation. Further, dividend per share is positively related to board meeting frequency, institutional ownership, foreign ownership, firm profitability and age, while it is negatively related to CEO duality, managerial ownership, and firm leverage. There is no evidence that family ownership exerts an impact on dividend payout policy in Saudi firms. The findings of this study support agency, signalling, substitute and outcome theories of dividend policy.Research limitations/implicationsThis study offers an important insight into the board characteristic and ownership structure drivers of dividend policy in the context of an emerging market. Moreover, the study has important implications for firms, managers, investors, policymakers, and regulators in Saudi Arabia.Originality/valueThis paper contributes to the existing literature by providing evidence on four board and five ownership characteristic drivers of dividend policy in Saudi Arabia as an emerging stock market, thereby improving on less comprehensive previous studies. The study recommends that investors consider board composition and ownership structure characteristics of firms as key drivers of dividend policy when making stock investment decisions to inform them about the propensity of investee firms to pay dividends and maintain a given dividend policy.

Kebijakan Pembagian Dividen Perusahaan BUMN Indonesia Periode 2011-2016

2018 ◽  
Vol 17 (1) ◽  
pp. 65
Author(s):  
Siti Nurainul Jannah
Keyword(s):  
Dividend Policy ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Secondary Data ◽  
Multiple Linear Regression Analysis ◽  
Payout Policy ◽  
Company Size ◽  
Dividend Payout ◽  
Independent Variables ◽  
Asset Growth

The purpose of this study is to analyze the factors that influence the dividend payout policy on BUMN companies listed in Indonesia Stock Exchange period 2011-2016. The independent variables used in this research are profitability, liquidity, asset growth, and company size. The method used is the method of quantitative research and the object of research is a state-owned company listed on the Indonesia Stock Exchange. The data used in this study was secondary data in the form of financial statements obtained by data collection techniques using documentation method. The sample used in this research is twelve companies using purposive sampling method. The technique of data analysis using was multiple linear regression analysis using SPSS test tool. The results showed that all independent variables together positive effect on dividend policy. While the t-test results show that only Profitability variables that have a positive and significant influence toward the dividend payout policy. The independent variables liquidity, asset growth, and company size have a positive and insignificant effect on dividend policy. The dividend payout policy is one of the main concerns of the stakeholders. However, this study uses only four independent variables to analyze the factors that influence the dependent variable. The magnitude of influence of all independent variables in this study only 33% and the rest much influenced by other variables outside in this study. Keywords: dividend payout policy, profitability, liquidity, asset growth, company size

scholarly journals The Relationship between Ownership Structure and Dividend Policy: An Application in Vietnam Stock Exchange

2019 ◽  
Vol 8 (2) ◽  
pp. 131-146
Author(s):  
Thi Xuan Anh Tran ◽  
Quoc Tuan Le
Keyword(s):  
Ownership Structure ◽  
Institutional Investors ◽  
Stock Exchange ◽  
Payout Policy ◽  
Ownership Concentration ◽  
H Index ◽  
Dividend Payout ◽  
Listed Firms ◽  
Ownership Composition ◽  
The Relationship

Abstract This research examines the possible association between ownership structure and Vietnam listed companies’ dividend payout policy over the period of 2009 – 2015. We have investigated 642 listed firms in Hochiminh stock exchange and Hanoi stock exchange, using pannel data analysis. Ownership structure is described with two main sub-variables: ownership concentration and ownership composition. Specifically, the Herfindahl index (or H-index) was applied to measure the level of ownership concentration /dispersion for all major shareholders in the company, including the five biggest investors, corporate institutional investors, the ownership concentration level, and foreign investors. It has been observed that the H-index of all major shareholders has an average of less than 0.5 but the value of the H-index of institutional investors at 0.594 indicates that institutional investors are more likely to be concentrated in the hands of large institutional investors. The result showed linear relationship between institutional ownership and the dividend rate, but not statistically significant for the relationship between managerial ownership and dividend payout ratio.

scholarly journals Determinants of dividend payout policy: An empirical study of banking sector of Pakistan

2016 ◽  
Vol 10 (4-5) ◽  
pp. 101-106 ◽  
Author(s):  
Ishtiaq Ahmad ◽  
Muhammad Fahid Muqaddas
Keyword(s):  
Dividend Policy ◽  
Banking Sector ◽  
Stock Exchange ◽  
Payout Policy ◽  
Panel Regression ◽  
Financial Efficiency ◽  
Safety Risk ◽  
Dividend Payout ◽  
Jel Code ◽  
Relationship Of

One good way to communicate financial performance of a bank to its shareholders is the payment of dividend. The present study is attempted to explore the influence of financial efficiency, safety, risk and profitability on dividend policy using panel data of 10 commercial banks listed at Pakistan Stock Exchange (PSX) for a period of 9 years between 2006 to 2014. The panel regression technique is used to analyze the data. The analysis shows a positive relationship of dividend payout ratio with safety and profitability in banking sector of Pakistan. The study identifies a negative association of dividend payout measure with financial efficiency and risk. The results show the statistically significant association of safety, risk and profitability with dividend payout ratio. Based on these findings it is concluded that safety, risk and profitability measures are relatively strong measures for defining dividend policy. The results are strongly indicating that safer the banks, the greater payout ratio the bank has. Moreover; banks with higher profitability and lower non-performing loans (NPLs) are believed to pay more dividends. JEL code: G21, G23, G35

scholarly journals Determinants of Dividend Payout Policy of Listed Corporations in Nigeria

2019 ◽  
pp. 134-141
Author(s):  
Peter E. Ayunku ◽  
Dumani Markjackson
Keyword(s):  
Dividend Policy ◽  
Negative Impact ◽  
Positive Impact ◽  
Stock Exchange ◽  
Payout Policy ◽  
Policy Statement ◽  
Company Size ◽  
Dividend Payout ◽  
Ex Post ◽  
The Universe

This study examines the underlying components that determine the dividend policy statement of corporations in Nigeria. The study purposively select ninety-four (94) corporations out of the universe of companies listed in the Nigerian Stock Exchange. Financial ratios were extracted and computed from published annual audited financial reports spanning 2007 to 2017. This was informed by the ex-post facto research design adopted to observe key indicators of these corporations in retrospect. The panel regression analysis was used to explain the numerical phenomenon collated. The Durbin-Wu-Hausman specification test found the fixed effect model to be more suitable. The empirical results indicate that financial leverage has a significant negative impact on dividend payout; liquidity has an insignificant positive impact on dividend payout policy; profitability has an insignificant positive impact on dividend payout decision; and company size has a significant positive impact on dividend payout dicision. The study concluses that liquidity, profitability and company size are the determinants of the dividend policy of corporations in Nigeria. More specifically, company size was found to be a major determinant to the dividend policy statement of corporations in Nigeria. The study suggests that, corporations should sustain their liquid positions, asset base and profit levels at all times to meet the universe of desires of their shareholders.

scholarly journals Assessing Relationship Among Managerial Ownership, Leverage and Dividend Policy: Evidence From Pakistani Listed Firms in PSX 100 Index

2020 ◽  
Vol 9 (4) ◽  
pp. 483-496
Author(s):  
IHTESHAM KHAN ◽  
SHAH RAZA KHAN ◽  
ADNAN KHATTAK
Keyword(s):  
Dividend Policy ◽  
Positive Impact ◽  
Stock Exchange ◽  
Positive Association ◽  
Negative Association ◽  
Managerial Ownership ◽  
Gmm Estimation ◽  
Dividend Payout ◽  
Listed Firms ◽  
The Relationship

The aim of this study is to investigate the relationship between the managerial ownership, leverage and dividend Payout. The analysis is performed using GMM estimation on a sample of 40 non-financial listed Firms of Pakistan stock exchange for the period 2010–2016. The results show that there is negative association between Managerial ownership and Leverage, Positive association between Managerial ownership and Dividend payout. Leverage and Dividend payout has negative association. However, conflicting to expectations, managerial ownership is found to have positive impact on dividend. It means that companies with higher levels of managerial holdings are consciously choosing higher level of dividends. Keywords: Managerial Ownership, Leverage and Dividend Policy.

scholarly journals Effect of Corporate Governance Index on Dividend Policy: An Investigation of Textile Industry of Pakistan

2017 ◽  
Vol 5 (2) ◽  
Author(s):  
Safdar Husain Tahir ◽  
Sara Sohail ◽  
Saba Babar ◽  
Irtaza Oayyum
Keyword(s):  
Corporate Governance ◽  
Textile Industry ◽  
Dividend Policy ◽  
Positive Impact ◽  
Stock Exchange ◽  
Payout Policy ◽  
Profit Margin ◽  
Dividend Payout ◽  
Governance Index ◽  
The Impact

This study empirically observes the impact of corporate governance index on dividend payout policy by using the data on thirty textile firms listed at Karachi Stock Exchange. The data cover the five-year period from 2009 to 2013. The data were gathered from financial statements of all the sample firms. Multiple regression models were used to check the impact of corporate governance on dividend policy. No effect of corporate governance index on firm dividend policy was found, and the largest shareholders also had no impact on dividend payout policy. A significant positive relationship was found between payout policy and stock value. Gross profit margin and operating profit margin had significant positive impact on the firm’s dividend payout policy. There is a significant correlation between the firm’s performance and payout policy.

Does political instability influence dividend payout policy: evidence from Tunisian Stock Exchange?

2020 ◽  
Vol 15 (2) ◽  
pp. 253-267
Author(s):  
Nadia Loukil
Keyword(s):  
Dividend Policy ◽  
Stock Exchange ◽  
Emerging Market ◽  
Political Instability ◽  
Payout Policy ◽  
Equity Capital ◽  
Dividend Payment ◽  
Dividend Payout ◽  
Content Type ◽  
Ruling Party

PurposeThe purpose of this study tests whether political instability influence financial decision-making behavior of Tunisian-listed firms, in particular dividend payout policy.Design/methodology/approachThis paper uses dividend payout decisions announced over the period 2008–2015 by nonfinancial firms listed on the Tunisian Stock Exchange. A logistic regression is applied to analyze the relationship between political instability and dividend payout decision “changes. These latter are: past non-payers” dividend initiation, past payers' dividend termination, dividend payout “increasing and dividend payout” decreasing. Political instability variables used are as follows: number of changes in government head and dummy variables indicating the changes of ruling party and election year.FindingsThis study shows that government head changes are positively related to dividend initiation decisions while changes in ruling party are negatively related to termination dividend decisions except for family controlled ones. These firms are more likely to stop dividend on period of ruling party changes. Moreover, firms become unwilling to increase dividend payment on the period of political instability (changes in ruling party and government head and elections) and become willing to decrease dividend payment only when the government head changes.Practical implicationsThe empirical findings contribute to the current debate on the signaling power of dividend policy in emerging market where raising equity capital is difficult and controlling shareholders prefer reinvest benefit to pay dividends. In addition, this study has important implications for regulators and governments struggling to design policies to improve investors' confidence and boost market activity. Indeed, investors may use corporate payout as a signal for better governance.Originality/valueTo the author' best knowledge, this paper is the first to investigate and to compare the effect of three political instability sources; government head changes, changes in ruling party and elections, on dividend payout decision changes. This paper provides evidence that firms facing political unstable environment seek to achieve two goals when they make dividend policy: reducing financial distress probability and attracting minority owners.

scholarly journals Firm Level Determinants and Dividend Policy in Pakistan

2019 ◽  
Vol 8 (2S9) ◽  
pp. 924-929
Keyword(s):  
Corporate Finance ◽  
Firm Size ◽  
Dividend Policy ◽  
Corporate Tax ◽  
Firm Level ◽  
Dividend Payout ◽  
Listed Firms ◽  
Investment Opportunities ◽  
Specific Factors ◽  
The Impact

Dividend policy is a challenge in the field of corporate finance. This paper finds out the important factors of dividend policy of Pakistani listed firms. The current paper aims to examine the impact of firm specific factors of dividend policy in Pakistan. The factors examine in this study are profitability, free cash flow, firm size, liquidity, financial leverage, investment opportunities and corporate tax. The data are collected from annual reports and Pakistan Stock Exchange. To accomplish the objective, financial data from 2000 to 2017 are collected and analyzed to examine the impact of firm level determinants on dividend payout. This paper used pooled ordinary least squares model and fixed effect model. The findings reveal that firm specific factors have significant influence on dividend policy in Pakistan. The profitability of firm and corporate tax has positive influence, whereas firm size and investment opportunities have negative impact on dividend payout. The implication of current research is useful for board of directors and managers to decide the appropriate dividend policy for firm. This study is also helpful for investors about investment decision. This research is a contribution to the existing body of knowledge about the determinants that influence dividend policy of Pakistani listed firms. Future researcher should use the same phenomenon in different emerging economies using the different approach to reduce the dividend puzzle in the field of corporate finance

ANALISIS PENGARUH AGENCY COST TERHADAP DIVIDEND PAYOUT RATIO (Pada Perusahaan Manufaktur di Bursa Efek Indonesia Tahun 2010-2011)

2013 ◽  
Author(s):  
Raudhatul Hidayah
Keyword(s):  
Firm Size ◽  
Sampling Method ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Agency Cost ◽  
Regression Method ◽  
Linear Regression Method ◽  
Dividend Payout ◽  
Multiple Linear Regression Method

The main purpose of the research was to know partially the influence of institutional ownership, collateralizable assets, debt to total assets and firm size on dividend payout ratio in firms that listed at Indonesia Stock Exchange of 2010–2011 period. The other purpose is to know simultaneously the influence of institutional ownership, collateralizable assets, debt to total assets and firm size on dividend payout ratio in firms that listed at Indonesia Stock Exchange of 2010–2011 period. The population of this research was all the firms that listed at Indonesia Stock Exchange of 2010-2011 period namely, 136 in number. The sample, 27 firms, was taken by the use of purposive sampling method. The technique of data collection used was documentation.  The data analysis made use of multiple linear regression method. The results showed that partially institutional ownership had a positive and significant effect to dividend policy. Collateralizable assets, debt to total assets and firm size partially was not significant to dividend policy. Simultaneously institutional ownership, collateralizable assets, debt to total assets and firm size had a positive and significant effect to dividend payout ratio.

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