A Sectoral Analysis of Dividend Payment Behavior

This study investigates the dividend behaviour of the Jordanian companies listed in Amman Stock Exchange. In specific, it examines whether dividends policy differs according to firm size, whether it differs for diverse sectors and whether it is stable over time. The sample of the study consists of 90 Jordanian companies listed in Amman Stock Exchange (ASE), 30 companies from each sector: financial, services and industrial, with 990 observations of dividends per share (DPS), earnings per share (EPS) and market capitalization (MC) over the period (2006–2016). The study uses non‐parametric tests in addition to regression analysis. Results show that there are statistically significant differences between DPS in the three sectors (financial, industrial and services). Statistically significant differences in DPS between different sized companies in the three sectors (financial, industrial and services) in ASE are also found. The dividends are stable over time.

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“…Our results are consistent with Pandey (2003) and Khan and Shamim (2017) who find that dividends differ significantly across different sectors.…”

Section: Results Of Analysissupporting

confidence: 92%

“…Khan and Shamim (2017) examine the sector‐wise dividend payment behaviour of Karachi Stock Exchange over the period (2009–2013). The population of the study includes all (32) sectors.…”

Section: Literature Reviewmentioning

confidence: 99%

The dividends behaviour of the Jordanian companies listed in Amman Stock Exchange: Three essays

2020

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“…The study was based on a sample of 31,234 firms representing 15 different industry sectors. Kapoor et al (2010) have done a study in India on the service sector; Khan and Shamim (2017) studied the drivers of dividend policy in Pakistan on 32 sectors and compared the drivers of each sector; George and Kumudha (2005) tested the Lintner model in Hindustan Construction Co. Ltd.; Kamat (2016) studied the industry affiliation of the dividend policy across 20 sectors; and Hudiwijono et al (2018) did a study on the drivers of dividend payout in the construction companies Listed on the Indonesian Stock Exchange. These sector specific studies revealed that the determinants of dividend payout vary from one sector to another.…”

Section: Introductionmentioning

confidence: 99%

Determinants of dividend payout of construction companies: a panel data analysis

Singla

Samanta

2019

JFMPC

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Purpose This paper aims to examine the determinants of the dividend policy of the construction companies in India. Design/methodology/approach Data from 2011 to 2016 (six years) of 45 listed construction companies in India are collected, and a strong balanced panel is created. Dividend per share is dependent variable, and profitability, unstable earnings, institutional holding, cash flow, tangibility, liquidity, growth opportunities, age of the firm, life cycle, leverage, size of firm and taxation are explanatory variables. The panel is tested for stationarity and finally fixed and random-effect panel regression model with robust estimation option is performed. Findings The random effect model is found fit with an R2 of 62 per cent, and profitability, life cycle and size of the firm show a significant positive effect on dividend payment. Cash flow shows a negative significant relationship, indicating the presence of agency problem. Rest of the variables indicated an insignificant relationship. Research limitations/implications The study is carried out on a small sample of 45 companies with data of only six years. Further, there may be behavioral and psychological factors that drive the decision to declare dividend. Those factors have not been considered in present study. Despite considerable efforts, the author could not find more studies specific to the construction sector. Hence, the variables identified in the present study are more generic, even though a few sector-specific studies have been included. Originality/value The dividend policy determinants for the construction sector in India are investigated, and a comprehensive model based on 12 explanatory variables is tested to find the drivers of dividend payout in Indian construction companies. From the investor’s point of view, the sector has immense potential in terms of dividend as well as capital appreciation. Therefore, the study can be useful to the investors to understand the drivers of dividend payout in the construction sector. It can also be crucial for companies to create an appropriate dividend policy so as to attract and retain investors. The study contributes significantly to the existing body of knowledge by recommending the salient drivers of dividend payout in the construction sector based on a comprehensive dataset and using robust methodology.

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“…Also supported by (Yusof & Ismail, 2016) the results of his research mentioned profitability, company size and investment have a positive effect. Khan & Shamim (2017) the results of his research profitability has a positive effect while cash flow has a negative effect on dividend payments. Inversely proportional to (Brahmiah, Srinivasan, & Sangeetha, 2018) which states profitability, liquidity and company size have a negative effect on dividend payments.…”

Section: Introductionmentioning

confidence: 91%

Factors Affecting Dividend Payment Policy

Wibowo

Bana

2020

AMBR

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Dividend payments are a routine activity that is usually done by the company once a year. Before dividend payments are made many factors are considered before the company pays the dividends. This study aims to determine what factors affect the payment of dividends. The sample used in this study is all non-financial sector companies that pay dividends for 3 consecutive years 2016 to 2018. This study uses the Eviews test tool and uses multiple regression tests. The results of this study indicate that profitability, life cycle and company size have positive effects while liquidity, cash flow, growth opportunities and leverage have no effect on dividend payout policies.

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A Sectoral Analysis of Dividend Payment Behavior

Cited by 14 publications

References 31 publications

The dividends behaviour of the Jordanian companies listed in Amman Stock Exchange: Three essays

The dividends behaviour of the Jordanian companies listed in Amman Stock Exchange: Three essays

Determinants of dividend payout of construction companies: a panel data analysis

Factors Affecting Dividend Payment Policy

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