Determinants of Dividend Payout Policy in Emerging Markets: Evidence from the ASEAN Region

Le, Thi Thai Ha; Nguyễn, Xuân Hùng; Tran, Manh Dung

doi:10.18488/journal.aefr.2019.94.531.546

Cited by 14 publications

(24 citation statements)

References 41 publications

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“…Therefore, liquidity is a crucial factor in influencing the dividend payout. Extant studies establish the fact (Suliman Al-Fasfus 2020; Budagaga 2018; Rifat et al 2020; Le et al 2019; Rajesh Kumar and Sujit 2018; Chadha and Sharma 2015). Some studies suggest a positive relationship between the firm's free cash flow and the dividend payout ratio (Baker and Weigand 2015; Rochmah and Ardianto 2020).…”

Section: Free Cash Flowmentioning

confidence: 98%

Impact of Elimination of Dividend Distribution Tax on Indian Corporate Firms Amid COVID Disruptions

Agrawal

2021

JRFM

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Economic fallouts from COVID-19 have been unprecedented across all industries, with a handful of exceptions. The present study attempts to capture the impact of dividend distribution tax elimination, introduced through the Indian Finance Act 2020, on corporate dividend behavior in India. It explores the determinants of dividend payouts, changing payout decisions, dividend behavior of regular payers, and the prevalence of factors associated with changing payouts. Out of the top 1000 firms, based on their market capitalization at the Bombay Stock Exchange, 509 non-financial firms pursuing consistent dividend payments from 2015 to 2019 are analyzed. The study also examines the dividend behavior of regular payers exhibiting a stable or step-up payout from 2015 to 2019. COVID’s impact on the firm’s financial performance and sentiments seems to dominate, suppressing investors’ expectations of enhanced payouts associated with dividend distribution tax advantages, with considerable reductions in payouts and omissions shown by regular and irregular payers in 2020 and 2021 vis-à-vis the preceding years. The findings signify that the dividend payouts of sample firms are positively associated with the firms’ size, MBV ratio, and past dividends, and negatively allied with free cash flows and the EBITDA margin. Regular payers are observed to be more sensitive to past dividends. The study lends credence to the conservatism and prevalence of signaling and catering theories in the dividend behavior of Indian corporate firms.

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Section: Free Cash Flowmentioning

confidence: 98%

Impact of Elimination of Dividend Distribution Tax on Indian Corporate Firms Amid COVID Disruptions

Agrawal

2021

JRFM

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“…Dewasiri et al (2019) menyatakan bahwa terdapat 6 faktor yang cenderung diperhatikan oleh perusahaan dalam hal menentukan kebijakan pembayaran dividen seperti Past dividends, Corporate governance, Earnings, Ownership structure, Firm size, dan Free cash flow. Le et al (2019) menyatakan 3 faktor yang mempengaruhi pembayaran dividen di wilayah ASEAN yaitu Growth opportunity, Free cash flow, dan Leverage. Diantara faktor-faktor yang mempengaruhi kebijakan dividen, terdapat 3 faktor yang memiliki pengaruh signifikan dalam mempengaruhi kebijakan pembayaran dividen yaitu Free cash flow, Ownership structure, dan Growth opportunity.…”

Section: Gambar 1 Dpr Perusahaanunclassified

“…Penelitian oleh Rochmah & Ardianto (2020) yang menguji pengaruh dividend premium dan free cash flow terhadap kebijakan dividen pada 186 sampel perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia (BEI) menemukan bahwa free cash flow secara positif signifikan mempengaruhi kebijakan dividen. Hasil yang serupa ditemukan dalam penelitian oleh Dewasiri et al (2019), Alias et al (2016, Le et al (2019), Suhartono (2015), Paramita (2015), Suartawan & Yasa (2016), Anazonwu et al (2018), Bahri (2017) yang menyatakan bahwa peningkatan free cash flow suatu perusahaan berpengaruh positif signifikan terhadap jumlah dividen yang dibayarkan. Berdasarkan kajian teoritis dan empiris, maka dapat dirumuskan hipotesis dari peneilitian ini adalah sebagai berikut: H1 : Free cash flow berpengaruh positif signifikan terhadap kebijakan dividen.…”

Section: Gambar 1 Dpr Perusahaanunclassified

“…Pernyataan ini sesuai dengan pecking order theory dimana perusahaan dapat memilih menahan labanya atau membagikan dividen. Le et al (2019) dalam penelitiannya yang menganalisis faktor-faktor yang mempengaruhi kebijakan pembayaran dividen pada pasar modal di negara ASEAN (Malaysia, Indonesia, Thailand) periode 2012-2016 menemukan bahwa growth opportunity memiliki pengaruh negatif signifikan terhadap kebijakan pembayaran dividen pada ketiga negara tersebut. Temuan ini menunjukkan bahwa perilaku investasi pembiayaan perusahaan-perusahaan di negara-negara berkembang sama dengan negara-negara maju dimana semakin mature suatu perusahaan baik dari ukuran atau pertumbuhannya, maka laba perusahaan akan cenderung ditahan daripada dibagikan dalam bentuk dividen.…”

Section: Gambar 1 Dpr Perusahaanunclassified

“…Dapat disimpulkan bahwa free cash flow berpengaruh positif dan signifikan terhadap kebijakan dividen. Pernyataan tersebut sejalan dengan penelitian yang dilakukan oleh Sari & Budiasih (2016), Silaban & Pengestuti (2017), Mangundap et al (2018), Rochmah & Ardianto (2020), Dewasiri et al (2019), Alias et al (2016, Le et al (2019), Suhartono (2015), Paramita (2015), Suartawan & Yasa (2016), Anazonwu et al (2018), Bahri (2017.…”

Section: Tabel 4 Uji Koefisien Determinasiunclassified

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Pengaruh Free Cash Flow, Ownership Structure, Growth Opportunity Terhadap Kebijakan Dividen

Widiantari

Candradewi

2021

EJMUNUD

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This study aims to explain the effect of free cash flow, ownership structure which is divided into managerial ownership and institutional ownership, and growth opportunity on dividend policy in property and real estate companies in Indonesia. This research is located in property and real estate companies listed on the Indonesia Stock Exchange. Sampling in this study using census techniques using the entire population of property and real estate companies that distribute dividends, so as to get a sample of 18. The analysis technique used in this study uses multiple linear regression analysis. From the analysis conducted, the results of the study indicate that free cash flow has a significant positive effect on dividend policy. Managerial ownership, which is proxied by the percentage of manager's share ownership, has a significant positive effect on dividend policy. Institutional ownership which is proxied by the percentage of institutional share ownership has a significant positive effect on dividend policy and growth opportunity which is proxied by asset growth has a significant positive effect on dividend policy. Keywords: free cash flow, ownership structure, growth opportunity, dividend policy

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Corporate tax policy, Shariah compliance and financial decisions: evidence from Malaysia

Ramachandran,

Hidajat,

Izadi

et al. 2024

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PurposeThis study investigates the influence of corporate income tax on two corporate financial decisions — dividend and capital structure policies, particularly for Shariah compliant companies in Malaysia.Design/methodology/approachThe study considered data from a sample of 529 Malaysian listed companies from four industrial sectors from 2007–2021 (6,746 company-year observations, before eliminating outliers). Panel models such as Fixed Effect and Random effect models were used. The study specifically tested the effect of corporate income tax on dividend and capital structure policies for Shariah compliant companies (3,148 observations) and controlled for industrial sectors.Findings(1) Firms are mostly Shariah-compliant, less liquid, less profitable and smaller in size, (2) Broadly when analysed together, tax has no impact on debt-equity ratio while it has an impact on dividend per share, (3) However, when tested separately for Shariah compliant companies, the influence of effective tax on capital structure is very evident but not for dividend and (4) influence of industrial sector on the relationship between corporate tax and capital structure and dividend policy is significant. Results indicate that Shariah firms might be raising debt to gain tax advantage. Companies in general pay dividends to avoid reputational damage.Research limitations/implicationsThis study assumes that leverage and dividend policy decisions are the main outcomes of the changing tax policies, while it seems that there could be other important outcomes that can be tested in future research. The study also shows the changing tax regimes of different ASEAN countries but they have not been tested to see the differences between countries. It will be indeed interesting for future researchers to focus on this aspect.Originality/valueThe findings contribute to the literature on tax planning of the Shariah-compliant firms, a high growth business segment in the Asian context. The study discussed potential tax-based Islamic market product development.

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Determinants of Dividend Payout Policy in Emerging Markets: Evidence from the ASEAN Region

Cited by 14 publications

References 41 publications

Impact of Elimination of Dividend Distribution Tax on Indian Corporate Firms Amid COVID Disruptions

Impact of Elimination of Dividend Distribution Tax on Indian Corporate Firms Amid COVID Disruptions

Pengaruh Free Cash Flow, Ownership Structure, Growth Opportunity Terhadap Kebijakan Dividen

Corporate tax policy, Shariah compliance and financial decisions: evidence from Malaysia

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