Determinants of Dividend Payments of Non-financial Listed Companies in Hồ Chí Minh Stock Exchange
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Abstract
Abstract: This research aims to examine the determinants of dividend payments of non-financial listed companies in the Hồ Chí Minh Stock Exchange (HOSE) in the period 2007 to 2012. Using thePooled Ordinary Least Square and the Fixed effect model (FEM) for panel data, the authors found that in HOSE, the profitability of firms is statistically significant and negatively related to payout ratio (DPR). In other words, companies tend to plow back more earnings when profitability increases. Moreover, leverage has a positive and statistically significant relationship with DPR. There are no statistically significant differences in DPRs among accommodation services, mineral ore exploitation, investment consulting services and related services, supporting services, scientific and technical services and the other services industry. Meanwhile, DPRs in the remaining industries are statistically lower than those of the above-mentioned industries.
Keywords: Dividend policy, listed companies, HOSE.References
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[32] Rozeff, M. (1982), “Growth, Beta and Agency Costs as Determinants of Dividend Payout Ratios”, Journal of Financial Research, 5(3), pp. 249-259.
[33] Rafique, M. (2012), “Factors Affecting Dividend Payout: Evidence from Listed Non-financial Firms of Karachi Stock Exchange”, Business Management Dynamics, 1(11), pp. 76-92.
[34] Faccio, M., Lang, L., and Young, L. (2001), “Dividends and Expropriation”, American Economics Association, 91(1), pp. 54-78.
Gugler, K. and Yurtoglu, B. (2003), “Corporate Governance and Dividend Payout Policy in Germany”, European Economic Review, 47(4), pp. 731-758.
[2] Ahmed, H. and Javid, A. (2009), “The Determinants of Dividend Policy in Pakistan”, International Research Journal of Finance and Economics, 29(1), pp. 110-125.
[3] Al-Malkawi, H. and Nizar, H. (2008), “Factors Influencing Corporate Dividend Decision: Evidence from Jordanian Panel Data”, International Journal of Business, 13(2), pp. 177-195.
[4] Al Kuwari, D. (2009), “Determinants of the Dividend Policy in Emerging Stock Exchanges: The Case of GCC Countries”, Global Economy and Finance Journal, 2(2), pp. 38-63.
[5] Alli, K. L., Khan, A. Q., and Ramirez, G. G. (1993), “Determinants of Corporate Dividend Policy: A Factorial Analysis”, The Financial Review, 28(4), pp. 523-547.
[6] Amidu, M. and Abor, J. (2006), “Determinants of Dividend Payout Ratios in Ghana”, Journal of Risk Finance, 7(2), pp. 136-145.
[7] Bhattacharya, S. (1979), “Imperfect Information, Dividend Policy, and “the Bird in the Hand” Fallacy”, Bell Journal of Economics, 10(1), pp. 259-270.
[8] Bhattacharya, S. (1980), “Non-dissipative Signaling Structure and Dividend Policy”, Quarterly Journal of Economics, 95(1), pp. 1-24.
[9] Chay, J. B. and Suh, J. (2009), “Payout Policy and Cash-flow Uncertainty”, Journal of Financial Economics, 93(1), pp. 88-107.
[10] Chen, J. and Dhiensiri, N. (2009), “Determinants of Dividend Policy: The Evidence from New Zealand”, International Research Journal of Finance and Economics, 34, pp. 18-28.
[11] Collins, M. C., Saxena, A., and Wansley, J. (1996), “The Role of Insiders and Dividend Policy: A Comparison of Regulated and Unregulated Firms”, Journal of Financial and Strategic Decisions, 9(2).
[12] D’Souza, J. (1999), “Agency Cost, Market Risk, Investment Opportunities and Dividend Policy – An International Perspective”, Managerial Finance, 25(6), pp. 35-43.
[13] Easterbrook, F. (1984), “Two Agency-cost Explanations of Dividends”, The American Economic Review, 74(4), pp. 650-659.
[14] Eriotis, N. (2005), “The Effect of Distributed Earnings and Size of the Firm to its Dividend Policy”, International Business and Economics Journal, 4(1), pp. 67-74.
[15] Fama E. (1974), “The Empirical Relationship between Dividend and Investment Decisions of Firms”, The American Economic Review, 64(3), pp. 304-318.
[16] Gill, M., Biger, N. and Tibrewala, R. (2010), “Determinants of Dividend Payout Ratios: Evidence from United States”, The Open Business Journal, 3(1), pp. 8-14.
[17] Graham, J. and Kumar, A. (2006), “Do Dividend Clienteles Exist? Evidence on Dividend Preferences of Retail Investors”, Journal of Finance, 61(3), pp. 1305-1336.
[18] He, X., Li, M., Shi, J. and Twite, G. (2009), “Determinants of Dividend Policy in Chinese Firms: Cash versus Stock Dividends”, Journal of Corporate Finance.
[19] Higgins, R. C. (1972), “The Corporate Dividend-saving Decisions”, Journal of Financial and Quantitative Analysis, 7(2), pp. 1527-1541.
[20] Jensen, G., Solberg, D., and Zorn, T. (1992), “Simultaneous Determination of Insider Ownership, Debt, and Dividend Policies”, Journal of Financial and Quantitative Analysis, 27(2), pp. 247-263.
[21] Lintner, J. (1956), “Distribution of Incomes of Corporations among Dividends, Retained Earnings, and Taxes”, The American Economic Review, 46(2), pp. 97-113.
[22] Lloyd, W., Jahera, J. and Page, D. (1985), “Agency Costs and Dividend Payout Ratios”, Quarterly Journal of Business and Economics, 24(1), pp. 19-29.
[23] Malik, F., Gul, S., Khan, M. T., Rehman, S. U., and Khan, M. (2013), “Factors Influence Corporate Dividend Payout Decisions of Financial and Non-financial Firms”, Research Journal of Finance and Accounting, 4(1), pp. 35-46.
[24] Mehta, A. (2012), “An Empirical Analysis of Determinants of Dividend Policy - Evidence from the UAE Countries”, Global Review of Accounting and Finance, 3(1), pp. 18-31.
[25] Miller, M. and Modigliani, F. (1961), “Dividend Policy, Growth, and the Valuation of Shares”, The Journal of Business, 34(4), pp. 411-433.
[26] Miller, M. and Rock, K. (1985), “Dividend Policy under Asymmetric Information”, Journal of Finance, 40(4), pp. 1031-1051.
[27] Myers, S. (1984), “The Capital Structure Puzzle”, The Journal of Finance, 39(3), pp. 574-592.
[28] Myers, S. and Majluf, N. (1984), “Corporate Financing and Investment Decisions when Firms have Information that Investors do not have”, Journal of Financial Economics, 13(2), pp. 187-221.
[29] Naceur, S. B. and Goaied, M. (2002), “The Relationship between Dividend Policy, Financial Structure, Profitability and Firm Value”, Applied Financial Economics, 12(12), pp. 843-849.
[30] Ross, S. (1977), “The Determination of Financial Structure: The Incentive Signaling Approach”, Bell Journal of Economics, 8(1), pp. 23-40.
[31] Ross, S., Randolph, A., Westerfield, W., and Jaffe, J. (2008), Corporate Finance (Kindle Locations 17034-17035). McGraw-Hill Higher Education.
[32] Rozeff, M. (1982), “Growth, Beta and Agency Costs as Determinants of Dividend Payout Ratios”, Journal of Financial Research, 5(3), pp. 249-259.
[33] Rafique, M. (2012), “Factors Affecting Dividend Payout: Evidence from Listed Non-financial Firms of Karachi Stock Exchange”, Business Management Dynamics, 1(11), pp. 76-92.
[34] Faccio, M., Lang, L., and Young, L. (2001), “Dividends and Expropriation”, American Economics Association, 91(1), pp. 54-78.
Gugler, K. and Yurtoglu, B. (2003), “Corporate Governance and Dividend Payout Policy in Germany”, European Economic Review, 47(4), pp. 731-758.