Factors Influencing Dividend Policy Decisions of Nasdaq Firms

Baker, H. Kent; Veit, E. Theodore; Powell, Gary E.

doi:10.1111/j.1540-6288.2001.tb00018.x

Cited by 153 publications

(185 citation statements)

References 22 publications

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“…Miller and Modigliani (1961) argue that given perfect capital markets, the dividend decision does not affect firm value and is, therefore, irrelevant. However, subsequent studies have disproved the notion of a perfect capital market and have offered theories about how dividends affect firm value, and how managers should make dividend policy decisions (Baker et al, 2001). For instance, Dhanani (2005) outlined four types of market imperfections, thus rendering Miller and Modigliani"s (1961) assertion untenable.…”

Section: Introductionmentioning

confidence: 99%

Dividend Policy Decision across African Countries

Yensu¹,

Adusei²

2016

IJEF

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This paper provides analysis of the trends in dividend policy and differentials in firm and country specific factors for payers and non-payers of dividends and examines the predictions concerning the amount of dividends paid by listed non-financial firms in African countries. Using a panel dataset over the period 1994-2011 from 13 African countries, the study found that dividend payers are more profitable, have larger firm size, greater investment, higher retention of earnings and less financial leverage than non-paying firms. The results show that in countries where the GDP per capita is low, firms are more likely to pay dividends. The level of corruption is high for non-payers of dividends. The study also found a positive significant relationship between dividend payout, profitability, investment opportunities and firm size. However, a significant negative relationship was reported between dividend payout, financial leverage, corruption and gross domestic product per capita. The study further found that the dividend trends were very low and stable. The conclusion, therefore, indicates that although firm specific factors are important in Africa in determining dividend policy regarding payout, country specific factors play very significant roles in determining the dividend payout of African firms.

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Section: Introductionmentioning

confidence: 99%

Dividend Policy Decision across African Countries

Yensu¹,

Adusei²

2016

IJEF

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“…The verification of this thesis and to identify the most important factors influencing the dividend payout ratio was subject to a wide variety of research. According to Baker, et al [2001], the key determinants of dividend policy are the pattern of past dividends, stability of earnings and the level of current and expected future earnings. The results of these studies are consistent with the Lintner theory [1956].…”

Section: Related Studiesmentioning

confidence: 99%

The Relevance of Dividend Smoothing in the Construction Companies Listed on the Warsaw Stock Exchange

Gostkowska-Drzewicka¹,

Majerowska²

2016

Financial Sciences

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Summary: Dividend smoothing is a well-known empirical fact in developed countries. It is influenced by many factors. In this paper we analyse the relevance of dividend smoothing in the construction companies listed on the Warsaw Stock Exchange in 2000-2014. It is assumed that it is possible to estimate the level of dividend smoothing and to identify the factors determining this level. The implementation of the purpose and verification of the hypotheses required applying econometric models. The findings suggest that the Lintner model can be applied for construction companies listed on the Warsaw Stock Exchange because the smoothing effect was statistically significant in most cases. However, it was not possible to identify statistically significant smoothing factors, although these factors can be useful in order to estimate the logit model which is used to predict whether the company will pay a dividend or not.Keywords: dividend policy, economic factors, corporate payout, Lintner model, logit model. Streszczenie:Efekt wygładzania dywidendy jest empirycznie potwierdzony na rynkach finansowych w krajach wysoko rozwiniętych. Efekt ten jest uwarunkowany wieloma czynnikami. W niniejszym artykule dokonano analizy znaczenia wygładzania dywidendy w spółkach budowlanych notowanych na GPW w Warszawie w latach 2000-2014. Zakłada się, że możliwe są zarówno określenie nasilenia efektu wygładzania dywidendy, jak i identyfikacja uwarunkowań tego efektu. Aby osiągnąć tak sformułowany cel i zweryfikować założoną hipotezę, należało zastosować modele ekonometryczne. Jak wynika z przeprowadzonych badań, model Lintnera może być użyty w przypadku spółek budowlanych. Analizowane czynniki, wpły-wające na wygładzanie dywidendy, okazały się nieistotne statystycznie. Jednakże te same czynniki znalazły zastosowanie w modelu logitowym, który jest użytecznym narzędziem do prognozowania, czy spółka wypłaci dywidendę, czy nie.Słowa kluczowe: polityka dywidendy, czynniki ekonomiczne, wypłata dywidendy, model Lintnera, model logitowy.

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“…Researches intended to identify the expected influence of variables on the dividend policy of firms listed in different Stock Exchanges (Al-Twairjy, 2007;Baker, Rafique, 2012;Kim and Wonsiksul, 2010;Veit and Powell, 2001). The research of Moradi, Salehi & Honarmand (2010) on all listed companies in the Tehran Stock Exchange revealed a positive relationship of dividend with profitability; and a negative relationship of dividend with P/E, beta rate and debt ratio.…”

Section: Literature Reviewmentioning

confidence: 99%

Stock Market Investors’ Guide to Corporate Dividend Policy: Evidence from Pharmaceuticals and Chemicals Industries in Bangladesh

Chowdhury¹,

Jannatunnesa

2017

AJFA

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Dividend policy has been an important component in the arena of financial literature and providing evidence that dividend payout decisions are affected by various factors. Numerous studies have been conducted so far on corporate dividend policy in Bangladesh. The pharmaceuticals and chemicals industries of Bangladesh offer a lot of investment panorama for the retail investors. This research has been an endeavor to determine the factors affecting the dividend policy of these promising industries, and guide the investment decisions of the equity investors. In this attempt, this study is also a unique one to incorporate the chemicals industry along with the pharmaceuticals industry as both the industries constitute the 'pharmaceuticals and chemicals sector' listed in the stock market of Bangladesh. The study is a quantitative one based on secondary data. It comprises of different statistical analyses such as descriptive statistics, correlation matrix and multiple linear regression analysis, etc. Firm size, growth, liquidity, profitability, last year's dividend and P/E ratio are used as dependent variables. Besides, ownership structure, firm age, market share, and risk are used as control variables. The study explores that firm size has significant negative and last year's dividend ISSN 1946-052X 2017 ajfa.macrothink.org 167 has significant positive relationship with dividend payout. However, dividend payout does not depend on firm growth, liquidity, profitability and P/E ratio of a firm. The research outcome may have important implications for the improvement of investors' perceptions, which may assist them in their investment decisions in the researched industries. Certainly more work lies ahead to add to explanations for why some of the factors affect the dividend policy of the industries, while others have no significant impact thereon. Asian Journal of Finance & Accounting

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Factors Influencing Dividend Policy Decisions of Nasdaq Firms

Cited by 153 publications

References 22 publications

Dividend Policy Decision across African Countries

Dividend Policy Decision across African Countries

The Relevance of Dividend Smoothing in the Construction Companies Listed on the Warsaw Stock Exchange

Stock Market Investors’ Guide to Corporate Dividend Policy: Evidence from Pharmaceuticals and Chemicals Industries in Bangladesh

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