Dividend Policy Determinants: Evidence from Emerging Economies

Jafarova, Aynur (2015) Dividend Policy Determinants: Evidence from Emerging Economies. [Dissertation (University of Nottingham only)]

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Dividend pay-out policy has been a subject for an ongoing debate for the last few decades. Lots of researchers try to explain it through different theories while others claim its irrelevance. At the same time a number of empirical studies have been conducted based either on international or developed countries sample to find out determinants of dividend policy. This paper analyses determinants of dividend pay-out policy in emerging economies and compares them to the findings in developed countries. In the course of the research different models developed to explain dividend policies throughout the world were tested on the example of emerging market companies for 10-year period between 2003 and 2012.

Findings of the study suggest that (i) the amount of dividends paid in the developing countries is mainly driven by the profitability of a firm. Also, (ii) free cash flows that a firm own and the level of protection of creditor and shareholder rights in the country are found to have an impact on the dividend policy, being consistent with free cash flow and agency cost theories respectively. Finally, (iii) Lintner’s model which suggests existence of conservatism in managers’ pay-out decisions is also found to be applicable for emerging economy corporations. These findings are robust to numerous control variables and model specifications.

On the whole, results of the present study suggest both similarities and some differences of dividend policy determinants in emerging and developed economies.

Item Type: Dissertation (University of Nottingham only)
Depositing User: Jafarova, Aynur
Date Deposited: 23 Mar 2016 14:36
Last Modified: 31 Jan 2018 01:46
URI: http://eprints.nottingham.ac.uk/id/eprint/29856

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