Dividend Practices in Listed Companies: Study on the Manufacturing Sector of Bangladesh

Mohammad Shahidul Islam; Atm Adnan

doi:10.1515/mosr-2019-0001

.blurhash-client-img { display: none !important; }

Dividend Practices in Listed Companies: Study on the Manufacturing Sector of Bangladesh

Management of Organizations: Systematic Research

Volume 81 (2019): Issue 1 (June 2019)

By: Mohammad Shahidul Islam and Atm Adnan

Open Access

|Oct 2019

Abstract

The dividend model of the listed manufacturing firms and the organizational policies related to dividend decisions are analyzed to reveal the contemporary state of the payout pattern in the capital market of Bangladesh. This study exhibits the settings of dividend disbursement in association with the diverse aspects of the firm such as industry segment of the firm, the age of the firms, size, leverage, risk, and earnings.

References

1. Abor, J., Bokpin, G. A. (2010). Investment Opportunities, Corporate Finance, and Dividend Payout Policy: Evidence from Emerging Markets // Studies in Economics and Finance. Vol. 27(3), pp. 180–194. doi: https://doi.org/10.1108/10867371011060018.10.1108/10867371011060018
Open DOI Search in Google Scholar Back to article
2. Aggarwal, R., Kyaw, N. A. (2010). Capital Structure, Dividend Policy, and Multinationality: Theory Versus Empirical Evidence // International Review of Financial Analysis. Vol. 19(2), pp. 140–150. doi: https://doi.org/10.1016/j.irfa.2010.01.001.10.1016/j.irfa.2010.01.001
Open DOI Search in Google Scholar Back to article
3. Aivazian, V., Booth, L., Cleary, S. (2001). Do Firms in Emerging Markets Follow Different Dividend Policies From Those in the US: Evidence From Firms in Eight Emerging Countries // Journal of Financial Research. Vol. 26(3), pp. 175–188.
Search in Google Scholar Back to article
4. Aivazian, V., Booth, L., Cleary, S. (2003). Do Emerging Market Firms Follow Different Dividend Policies from US Firms? // Journal of Financial Research. Vol. 26(3), pp. 371–387. doi: https://doi.org/10.1111/1475-6803.00064.10.1111/1475-6803.00064
Open DOI Search in Google Scholar Back to article
5. Al-Twaijry, A. A. (2007). Dividend Policy and Payout Ratio: Evidence from the Kuala Lumpur Stock Exchange // The Journal of Risk Finance. Vol. 8(4), pp. 349–363. doi: https://doi.org/10.1108/15265940710777306.10.1108/15265940710777306
Open DOI Search in Google Scholar Back to article
6. Allen, I. E., Seaman, C. A. (2007). Likert Scales and Data Analyses // Quality Progress. Vol. 40(7), pp. 64–65.
Search in Google Scholar Back to article
7. Asquith, P., Mullins, D. W. (1983). The Impact of Initiating Dividend Payments on Shareholders’ Wealth // Journal of Business. Vol. 56(1), pp. 77–96. doi: https://doi.org/10.1086/296187.10.1086/296187
Open DOI Search in Google Scholar Back to article
8. Baker, H. K., Farrelly, G. E., Edelman, R. B. (1985). A Survey of Management Views on Dividend Policy // Financial Management. Vol. 14, No. 3, pp. 78–84.10.2307/3665062
Search in Google Scholar Back to article
9. Baker, H. K., Mukherjee, T. K., Paskelian, O. G. (2006). How Norwegian Managers View Dividend Policy // Global Finance Journal. Vol. 17(1), pp. 155–176.10.1016/j.gfj.2006.06.005
Search in Google Scholar Back to article
10. Baker, H. K., Powell, G. E. (2000). Determinants of Corporate Dividend Policy: A Survey of NYSE Firms // Financial Practice and Education. Vol. 10, pp. 29–40.
Search in Google Scholar Back to article
11. Baker, H. K., Powell, G. E., Veit, E. T. (2002). Revisiting the Dividend Puzzle: Do all of the Pieces Now Fit? // Review of Financial Economics. Vol. 11(4), pp. 241–261.10.1016/S1058-3300(02)00044-7
Search in Google Scholar Back to article
12. Baker, H. K., Smith, D. M. (2006). In Search of a Residual Dividend Policy // Review of Financial Economics. Vol. 15(1), pp. 1–18.10.1016/j.rfe.2004.10.002
Search in Google Scholar Back to article
13. Baker, H. K., Weigand, R. (2015). Corporate Dividend Policy Revisited // Managerial Finance. Vol. 41(2), pp. 126–144. doi: https://doi.org/10.1108/mf-03-2014-0077.10.1108/mf-03-2014-0077
Open DOI Search in Google Scholar Back to article
14. Ball, R., Brown, P., Finn, F. J., Officer, R. (1979). Dividends and the Value of the Firm: Evidence from the Australian Equity Market // Australian Journal of Management. Vol. 4(1), pp. 13–26.10.1177/031289627900400102
Search in Google Scholar Back to article
15. Bernhardt, D., Douglas, A., Robertson, F. (2005). Testing Dividend Signaling Models // Journal of Empirical Finance. Vol. 12(1), pp. 77–98.10.1016/j.jempfin.2003.10.002
Search in Google Scholar Back to article
16. Bhat, R., Pandey, I. (1994). Dividend Decision: A Study of Managers’ Perceptions // Decision, Vol. 21(1), pp. 67–86.
Search in Google Scholar Back to article
17. Bhattacharyya, N. (2007). Dividend Policy: A Review // Managerial Finance. Vol. 33(1), pp. 4–13. doi: https://doi.org/10.1108/03074350710715773.10.1108/03074350710715773
Open DOI Search in Google Scholar Back to article
18. Black, F., Scholes, M. (1973). The Pricing of Options and Corporate Liabilities // Journal of Political Economy. Vol. 81(3), pp. 637–654.10.1086/260062
Search in Google Scholar Back to article
19. Boţoc, C., Pirtea, M. (2014). Dividend payout-Policy Drivers: Evidence from Emerging Countries // Emerging Markets Finance and Trade. Vol. 50, Issue sup4, 95–112. doi: https://doi.org/10.2753/ree1540-496x5004s40710.2753/ree1540-496x5004s407
Open DOI Search in Google Scholar Back to article
20. Brav, A., Graham, J. R., Harvey, C. R., Michaely, R. (2005). Payout Policy in the 21st Century // Journal of Financial Economics. Vol. 77(3), pp. 483–527.10.1016/j.jfineco.2004.07.004
Search in Google Scholar Back to article
21. Collins, M. C., Saxena, A. K., Wansley, J. W. (1996). The Role of Insiders and Dividend Policy: A Comparison of Regulated and Unregulated Firms // Journal of Financial and Strategic Decisions. Vol. 9(2), pp. 1–9.
Search in Google Scholar Back to article
22. DeAngelo, H., DeAngelo, L. (2006). The Irrelevance of the MM Dividend Irrelevance Theorem // Journal of Financial Economics. Vol. 79(2), pp. 293–315.10.1016/j.jfineco.2005.03.003
Search in Google Scholar Back to article
23. Denis, D. J., Osobov, I. (2008). Why do Firms Pay Dividends? International Evidence on the Determinants of Dividend Policy // Journal of Financial Economics. Vol. 89(1), pp. 62–82.10.1016/j.jfineco.2007.06.006
Search in Google Scholar Back to article
24. Dhameja, N. L. (1976). Corporate Dividend Behaviour with Special Emphasis on Growth and Controlled Companies.
Search in Google Scholar Back to article
25. Edelman, R. B., Farrelly, G. E. (1983). Analyzing Dividend Policy: A Questionnaire Survey.
Search in Google Scholar Back to article
26. Fama, E. F., Babiak, H. (1968). Dividend Policy: An Empirical Analysis // Journal of the American Statistical Association. Vol. 63(324), pp. 1132–1161.10.1080/01621459.1968.10480917
Search in Google Scholar Back to article
27. Fama, E. F., French, K. R. (2002). Testing Trade-off and Pecking Order Predictions about Dividends and Debt // The Review of Financial Studies. Vol. 15(1), pp. 1–33.10.1093/rfs/15.1.1
Search in Google Scholar Back to article
28. Frank, M. Z., Goyal, V. K. (2003). Testing the Pecking Order Theory of Capital Structure // Journal of Financial Economics. Vol. 67(2), pp. 217–248.10.1016/S0304-405X(02)00252-0
Search in Google Scholar Back to article
29. Frankfurter, G. M., Lane, W. R. (1992). The Rationality of Dividends // International Review of Financial Analysis. Vol. 1(2), pp. 115–129.10.1016/S1057-5219(15)30010-7
Search in Google Scholar Back to article
30. Frankfurter, G. M., Wood Jr, B. G. (2002). Dividend Policy Theories and Their Empirical Tests // International Review of Financial Analysis. Vol. 11(2), pp. 111–138.10.1016/S1057-5219(02)00071-6
Search in Google Scholar Back to article
31. Glen, J. D., Karmokolias, Y., Miller, R. R., Shah, S. (1995). Dividend Policy and Behavior in Emerging Markets: To Pay or Not To Pay. – The World Bank.
Search in Google Scholar Back to article
32. Graham, J. R., Kumar, A. (2006). Do Dividend Clienteles Exist? Evidence on Dividend Preferences of Retail Investors // The Journal of Finance. Vol. 61(3), pp. 1305–1336.10.1111/j.1540-6261.2006.00873.x
Search in Google Scholar Back to article
33. Gugler, K., Yurtoglu, B. B. (2003). Corporate Governance and Dividend Pay-Out Policy in Germany // European Economic Review. Vol. 47(4), pp. 731–758.10.1016/S0014-2921(02)00291-X
Search in Google Scholar Back to article
34. Hashemijoo, M., Mahdavi-Ardekani, A., Younesi, N. (2012). The Impact of Dividend Policy on Share Price Volatility in the Malaysian Stock Market // Journal of Business Studies Quarterly. Vol. 4(1).
Search in Google Scholar Back to article
35. Ho, H. (2003). Dividend Policies in Australia and Japan // International Advances in Economic Research. Vol. 9(2), pp. 91–100.10.1007/BF02295710
Search in Google Scholar Back to article
36. Hussainey, K., Oscar Mgbame, C., Chijoke-Mgbame, A. M. (2011). Dividend Policy and Share Price Volatility: UK Evidence // The Journal of risk finance. Vol. 12(1), pp. 57–68.10.1108/15265941111100076
Search in Google Scholar Back to article
37. Jensen, M. C. (1986). Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers. The American Economic Review. Vol. 76(2), pp. 323–329.
Search in Google Scholar Back to article
38. Kania, S., Bacon, F. (2005). What Factors Motivate the Corporate Dividend Decision // American Society of Business and Behavioral Sciences E-Journal. Vol. 1(1), pp. 97–107.
Search in Google Scholar Back to article
39. Kania, S. L. (2005). What Factors Motivate the Corporate Dividend Decision? Theses, Dissertations & Honors Papers, p.195.
Search in Google Scholar Back to article
40. Kumar, J. (2003). Ownership Structure and Dividend Pay-Out in India: Working Paper. Indira Gandhi Institute of Development Research.
Search in Google Scholar Back to article
41. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., Vishny, R. W. (2000). Agency Problems and Dividend Policies Around the World // The Journal of Finance. Vol. 55(1), pp. 1–33.10.1111/0022-1082.00199
Search in Google Scholar Back to article
42. Lang, L. H., Litzenberger, R. H. (1989). Dividend Announcements: Cash Flow Signalling vs. Free Cash Flow Hypothesis? // Journal of financial economics. Vol. 24(1), pp. 181–191.10.1016/0304-405X(89)90077-9
Search in Google Scholar Back to article
43. Lease, R. C., John, K., Kalay, A., Loewenstein, U., Sarig, O. H. (1999). Dividend Policy: Its Impact on Firm Value // OUP Catalogue. – Oxford University Press.
Search in Google Scholar Back to article
44. Lintner, J. (1956). Distribution of Incomes of Corporations Among Dividends, Retained Earnings, and Taxes // The American Economic Review. Vol. 46(2), pp. 97–113.
Search in Google Scholar Back to article
45. Lintner, J. (1962). Dividends, Earnings, Leverage, Stock Prices and the Supply of Capital to Corporations // The Review of Economics and Statistics. Vol. 44, pp. 243–269. doi: http://dx.doi.org/10.2307/192779210.2307/1927792
Open DOI Search in Google Scholar Back to article
46. Miller, M., Modigliani, F. (1961). Dividend Policy, Growth, and the Valuation of Shares.10.1086/294442
Search in Google Scholar Back to article
47. Mohanty, P. (1999). Dividend and Bonus Policies of Indian Companies: An Analysis // Vikalpa. Vol. 24(4), pp. 35–42.10.1177/0256090919990406
Search in Google Scholar Back to article
48. Naeem, S., Nasr, M. (2007). Dividend Policy of Pakistani Firms: Trends and Determinants // International Review of Business Research Papers. Vol. 3(3), pp. 242–254.
Search in Google Scholar Back to article
49. Nizar Al-Malkawi, H.-A. (2007). Determinants of Corporate Dividend Policy in Jordan: An Application of the Tobit Model // Journal of Economic and Administrative Sciences. Vol. 23(2), pp. 44–70.10.1108/10264116200700007
Search in Google Scholar Back to article
50. Partington, G. H. (1989). Variables Influencing Dividend Policy in Australia: Survey Results // Journal of Business Finance & Accounting. Vol. 16(2), pp. 165–182.10.1111/j.1468-5957.1989.tb00011.x
Search in Google Scholar Back to article
51. Parua, A., Gupta, A. (2009). Dividend Histories and Determinants in Selected Indian Companies: A Study During 1993-’94 to 2004- ’05 // Australasian Accounting Business & Finance Journal, Vol. 3(4), 45A.
Search in Google Scholar Back to article
52. Pettit, R. R. (1977). Taxes, Transactions Costs and the Clientele Effect of Dividends // Journal of financial Economics, Vol. 5(3), pp. 419–436.10.1016/0304-405X(77)90046-0
Search in Google Scholar Back to article
53. Richardson, G., Sefcik, S. E., Thompson, R. (1986). A Test of Dividend Irrelevance Using Volume Reactions to a Change in Dividend Policy // Journal of Financial Economics, Vol. 17(2), pp. 313–333.10.1016/0304-405X(86)90068-1
Search in Google Scholar Back to article
54. Ross, S. A. (2009). Neoclassical Finance. – Princeton University Press.10.2307/j.ctvcm4gxt
Search in Google Scholar Back to article
55. Rozeff, M. S. (1982). Growth, Beta and Agency Costs as Determinants of Dividend Payout Ratios // Journal of Financial Research, Vol. 5(3), pp. 249–259.10.1111/j.1475-6803.1982.tb00299.x
Search in Google Scholar Back to article
56. Shefrin, H. M., Statman, M. (1984). Explaining Investor Preference for Cash Dividends // Journal of Financial Economics. Vol. 13(2), pp. 253–282.10.1016/0304-405X(84)90025-4
Search in Google Scholar Back to article
57. Slovin, E. (1960). Slovin’s Formula for Sampling Technique.
Search in Google Scholar Back to article
58. Smith, D. M. (2009). Residual Dividend Policy / In Dividends and Dividend Policy. – John Wiley & Sons: Hoboken, NJ, pp. 115–126.10.1002/9781118258408.ch7
Search in Google Scholar Back to article
59. Smith Jr, C. W., Watts, R. L. (1992). The Investment Opportunity Set and Corporate Financing, Dividend, and Compensation Policies // Journal of Financial Economics. Vol. 32(3), pp. 263–292.10.1016/0304-405X(92)90029-W
Search in Google Scholar Back to article