Dividend Setting Behavior of Companies Listed in the Athens Stock Exchange

Charalambous, Charalambos (2006) Dividend Setting Behavior of Companies Listed in the Athens Stock Exchange. [Dissertation (University of Nottingham only)] (Unpublished)

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This dissertation is an empirical investigation of the dividend setting behavior of companies listed in the Athens Stock Exchange. We test four different models based on Lintner's partial adjustment model, on 24 companies for the period 1992-2006.

The first model introduces to the Lintner model a dummy variable which attempts to capture the change in the reluctance to cut dividends over the period 2001-2004, the aftermath of the dot-com bear market.

The second model introduces to our first model an interest rate variable, as an attempt to capture the effects the price of external financing has on dividend policy.

Our third and fourth model, are the same as models (1) and (2), but use real values for lagged dividends and current earnings. This is an attempt to investigate whether or not managers have a long run target payout, and adjust to that ratio in a speed that can be justified in real terms.

We do not find support for the variables we introduce. This can be concluded from the insignificant variables for the dummy variable, as well as the interest rate variable. Furthermore, we do not find support that companies listed in the Athens Stock Exchange follow partial adjustment process. This can be seen from a very low adjusted R2, of less than 50% in all models. Furthermore, our sample of firms has very high speed of adjustment of above 60% in all models. We observe very low payout rates between 25-30% in all models. The current earnings variable is insignificant for many companies, even at the 10% confidence level.

Our findings when compare to the literature, we conclude the sustainability of dividends in Greece is not as important as it used to be. We stress that our number of observations is very low when compared to the number of variables we test, and that our results might very well be affected by this.

Item Type: Dissertation (University of Nottingham only)
Keywords: Corporate Finance, Dividend Policy, Greek Firms
Depositing User: EP, Services
Date Deposited: 20 Dec 2006
Last Modified: 05 Jan 2018 22:37
URI: https://eprints.nottingham.ac.uk/id/eprint/20521

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