The Determinants of Corporate Dividend Policy in Poland

Abstract

[full article and abstract in English]
 The purpose of this research is to examine the factors that determine the dividend policy of non-financial firms listed on the Warsaw Stock Exchange (WSE) in Poland and that of the annually paid dividends. Up to now, many empirical studies related to dividend policy were carried out, showing the differentiation of factors affecting the dividend policy and their interaction. Thus, with this study, it would be possible to give a view on the dividend policy of corporations listed on the WSE for the period from 2008 to 2016. The study covers non-financial companies listed on the WSE in Poland. The Tobit regression is used to identify the impact of factors influencing the companies’ distribution of dividends. The variables that may explain a firm’s dividend decision and that were used in this study are selected based on the theory and available empirical researches and then also determined by data availability. These are profitability, investment opportunities, measures of size, leverage, and liquidity. As a result of this study, the factors that determine the dividend policy of companies were verified in the context of the companies listed on the WSE. Moreover, it indicates which of the existing theories on dividend policy could be applied to the capital markets of Poland. Thus, it provides new insights into the theory of dividend policy.

Determinants of Dividend Policy of Indonesian Companies: A Panel Data Analysis

“…The same phenomenon also happened to the liquidity variable, which was positively correlated and in accordance with the initial hypothesis at the 1% level. These values are in line with theories written by Labhane & Mahakud [5] and Rój [1]. A higher liquidity ratio then shows relatively smaller debt compared with assets; therefore, the possibility of paying higher dividends is even greater [5].…”

“…However, investment opportunities are positively correlated with the DPR, which is not in accordance with the initial hypothesis at the 10% level. This finding is in line with Rój [1], who measured the effect of several variables on dividend payouts in Poland. Rój stated that despite having high investment opportunities, companies in Poland still had sufficient cash to pay dividends.…”

“…This result is possible if companies that have many fixed assets in developing countries sometimes experience financial difficulties from the unavailability of short-term financing to cover working capital needs [5]. The results of the correlation are negative and significant at the 5% level for firm size variables, which is not in line with the research of Labhane & Mahakud [5] and Rój [1]. This finding indicates that small companies tend to pay even higher dividends.…”

“…Rój stated that despite having high investment opportunities, companies in Poland still had sufficient cash to pay dividends. This phenomenon may exist because Poland and Indonesia are still in developing markets, and the theories that apply to developed countries may not necessarily be in accordance with developing countries [1].…”

“…Discussions about dividends and their relationship with the company have continued for several years. According to the most common definition, dividends are a form of corporate profit distribution to all shareholders in return for the capital they provide to the company [1]. Thus, dividend policy has a relationship with the decision to pay out company profits or retain and invest them.…”