Recent Developments in Dividend Policy: Evidence from Indonesia

Fitriana, Aning; Dewi, Aqlima Cendera; Setiawan, Doddy

doi:10.26905/jkdp.v22i1.1799

Cited by 5 publications

(5 citation statements)

References 8 publications

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“…The classic theory is commonly used to explain the dividends payment is a Signaling theory that describes dividend is a good signal to the value of the firms. In a recent article, Dewi, Fitriana, & Setiawan (2018) discuss the development of dividend study in Indonesia. They classify the studies into four classifications; antecedent studies, consequence studies, antecedent & consequence studies, and other studies.…”

Section: Introductionmentioning

confidence: 99%

The role of earnings and tax on dividend policy of Indonesian listed firms

Hutagaol‐Martowidjojo

Joachim

Anggraeni

2019

Jurnal Keuangan Dan Perbankan

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Prior studies show that profitability is the main financial aspect that determines a firm's dividend policy. To add to the Indonesian' dividends literature, this study examines the role of earnings and tax as dividend policy in Indonesian listed firms. This study argues that besides profitability, Indonesian firms consider other financial performance, namely earnings (contributed capital and prior year earnings) and tax to determine their dividend policy, since earnings reflect firm's real ability to pay dividends, and tax affects the number of dividends should be paid. Using 1688 firm-year observations of Indonesian firms from 2012 to 2016, the panel data regression result shows that prior year's earnings and contributed capital, are the significant determinants of firms sample's dividend policy. However, the insignificant result is found in the corporate tax role. Meanwhile, the robustness test, earnings, and tax are significant and of the expected sign. The result implies that the higher the firms' earnings, the higher the dividend payout ratio that is used as a proxy to the firms' dividend policy. Corporate tax, on the other hand, is a significant negative determinant in some years of the observation. Higher corporate tax hinders managers to increase the dividend payout ratio. Abstrak Studi terdahulu menunjukkan bahwa profitabilitas adalah aspek keuangan utama yang menentukan kebijakan dividen perusahaan. Studi ini menambahkan literatur dividen perusahaan di Indonesia dengan mempelajari peranan earnings dan pajak pada penentuan kebijakan dividen perusahaan tercatat di Indonesia. Studi ini menyatakan bahwa selain profitabilitas, earnings (contributed capital dan earnings tahun sebelumnya) serta pajak menentukan kebijakan dividen perusahaan, karena earnings menggambarkan kemampuan real perusahaan membayar dividen dan pajak menentukan jumlah dividen yang akan dibayar. Dengan sampel observasi sebanyak 1688 tahun perusahaan pada periode 2012-2016, hasil analisa regresi panel data menunjukkan earnings adalah faktor yang signifikan dalam penentuan kebijakan dividen, tetapi hasil yang lemah ditemukan pada peranan pajak. Uji robustness menggunakan regresi OLS menunjukkan earnings dan pajak perusahaan adalah faktor yang signifikan dengan arah seperti yang diharapkan. Implikasi hasil penelitian adalah semakin tinggi earnings, semakin tinggi rasio dividend payout. Sebaliknya, pajak perusahaan berdampak negatif terhadap kebijakan dividen. Semakin tinggi pajak perusahaan akan menahan manajer membayar dividen lebih banyak, relative terhadap earnings perusahaan.

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Section: Introductionmentioning

confidence: 99%

The role of earnings and tax on dividend policy of Indonesian listed firms

Hutagaol‐Martowidjojo

Joachim

Anggraeni

2019

Jurnal Keuangan Dan Perbankan

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“…Baker and Powell (2012) stated that dividend policy is used to signal investors regarding future cash flow. Fitriana et al (2018) Stated that dividend policy is one of the indicators in the company for the welfare of its investors. If a company in its income statement receives net profit or earning after tax (EAT) for a certain period, then the management decides to distribute it to the shareholders.…”

Section: Dividend Policymentioning

confidence: 99%

The Effect of Financial Policy on the Performance of Industrial Companies in the Insurance Sub-Sector in Indonesia

Sаifi

2021

JAM

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Companies with good profitability will have better abilities to fund their dividends and investments. Companies experiencing a lack of funding to fund dividend payments and fund investments can use external funding through leverage. The object of this study is the industrial company of the insurance sub-sector; the selection of this object is based on the idea that insurance as a financial product is supposed to give an assurance to its customers regarding the promised coverage. This study is purposed to examine and explain the effect of financial policy on the company and its performance. The analytical method used is Partial Least Square with purposive sampling technique. The sample used is insurance companies listed on the IDX during the 2017-2019 period. Variables used in this study regarding the effect of financial policies on a company's performance are investment opportunity set, dividend policy, capital structure, and firm value. Based on the analysis results, it is shown that the mediation of Capital Structure and Dividend Policy give a significant positive effect on a company's performance as reflected in the firm value obtained. Thus good financial policies can be used as a strategy to attract investors' interest. The results of this study are expected to benefit the company's leadership in optimizing the company's value through the established financial policies.

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“…The dividend policy is one of the crucial decisions of the company and is an integral part of the company's spending decisions. Dividend policy is one of the indicators in the company for the welfare of its investors (Fitriana et al, 2018). Baker & Powell (2012) state that dividend policy signals investors regarding future cash flows.…”

Section: Introductionmentioning

confidence: 99%

The Effect of Financial Performance and Sales Growth on Dividend Policy with Firm Size as Moderating Variable in Automotive Sub-Sector Manufacturing Companies Listed on the IDX in 2016-2019

2021

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This study aims to determine the effect of financial performance and sales growth on dividend policy with firm size as a moderating variable in automotive sub-sector manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2016-2019. This research was conducted based on information obtained on the Indonesia Stock Exchange. This research uses the purposive sampling method. The population in this study is the automotive sub-sector manufacturing companies listed on the Indonesia Stock Exchange from 2016 to 2019, with a sample of 13 companies. The analysis technique used is by using software views. The results of this study indicate that Liquidity (CR) and Leverage (DER) have a significant effect on dividend policy while the variables Profitability (ROA), Leverage (DER), Activity (TATO), Growth, and Sales Growth have no significant effect on Dividend Policy in Automotive Sub-Sector Manufacturing Companies Listed on the IDX. The results of this study also show that Firm size can moderate Profitability (ROA), Leverage (DER), and Activity (TATO) on Dividend Policy. However, Firm size cannot moderate Liquidity (CR), Growth, and Sales Growth on Dividend Policy in the sub automotive sector listed on the Indonesia Stock Exchange. Keywords: Liquidity (CR), Profitability (ROA), Leverage (DER), Activity (TATO), Growth, Sales Growth, Dividend Policy (DPR), Firm Size.

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Recent Developments in Dividend Policy: Evidence from Indonesia

Cited by 5 publications

References 8 publications

The role of earnings and tax on dividend policy of Indonesian listed firms

The role of earnings and tax on dividend policy of Indonesian listed firms

The Effect of Financial Policy on the Performance of Industrial Companies in the Insurance Sub-Sector in Indonesia

The Effect of Financial Performance and Sales Growth on Dividend Policy with Firm Size as Moderating Variable in Automotive Sub-Sector Manufacturing Companies Listed on the IDX in 2016-2019

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