Determinants of dividend policy in ASEAN-5
This study provides evidence of dividend payout policy by ASEAN-5 (Malaysia, Indonesia, Philippines, Singapore and Thailand) firms during the period from 2000-2009. The number of listed firms paying dividends has declined significantly in recent years. This might be due to the increasing number o...
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| Main Author: | |
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| Format: | Thesis |
| Language: | English |
| Published: |
2013
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| Subjects: | |
| Online Access: | http://ir.unimas.my/id/eprint/9204/8/Chong%2C%20Boon%20Chiew.pdf |
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| Summary: | This study provides evidence of dividend payout policy by ASEAN-5
(Malaysia, Indonesia, Philippines, Singapore and Thailand) firms during the period
from 2000-2009. The number of listed firms paying dividends has declined
significantly in recent years. This might be due to the increasing number of nonpayers
that includes former payers and firms that never paid during the study period.
Nevertheless, upon applying the portfolio approach of Fama and French (2001), we
find evidence that offers hints of a decline in the propensity to pay dividends in some
of the sample countries, particularly among those firms that are at the margin for
paying dividends. From the univariate analysis, the evidence suggests that five
fundamentals such as profitability, firm size, growth opportunities, leverage and
earned equity are main factors in the decision to pay dividends among the ASEAN-5.
The empirical result from the logit regression model shows that those firms paying
dividends are larger, more profitable, have a substantially higher ratio of retained
earnings to common shareholder equity and have less debt ratio as well as growth
options than non-dividend-paying firms. These results are in line with Fama and
French (2001) and Eije and Megginson (2008). To some extent, the empirical
evidence does not concentrate on signaling theory for the propensity to pay dividend
but strongly supports the life cycle theory from DeAngelo et al. (2006). In addition,
consistent with Lintner (1956), the study also shows that dividend policies in all
countries exhibit stickiness characteristics. However, there still exist several
different characteristics of dividend payers and non-payers among the countries
represented in the study. |
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