Determinants of Dividend Policy of Real Estate, Property, and Building Construction Companies Listed in IDX with Unbalanced Panel Data Approach

Abstract

This study involved companies engaging in real estate, property, and building construction companies listed in IDX for 2013 - 2019 period as the population. Unbalanced panel data regression was employed using the SPSS version 22 and E-Views version 10 to analyze the data and to test the hypotheses. The results showed that the previous year's dividend had a positive effect on dividend policy, while company size had a negative effect on dividend policy. This study proved that previous year's dividend and company size were key variables that determined companies’ dividend policy and they were major investment considerations for investors in order to obtain optimal returns.

The Determinants of Dividend Policy: An Empirical Study of Inconsistent Distribution of Dividends Using Balanced Panel Data Analysis

“…This distribution is one of the attractions for the company to get funds while selling the issued shares (Tahir & Mushtaq, 2016). Moreover, dividends also indicate the certainty of return on investment to the company (Hartono & Matusin, 2020).…”

“…Moreover, the study of Alzomaia & Al-Khadhiri (2013); Hartono & Matusin (2020); and Maladjian & El Khoury (2014) showed that the previous dividend positively affects dividend policy. Based on what has been described, the ninth hypothesis is formulated as follows: H 9 : Previous Dividend positively affects dividend policy.…”

“…The higher the company's liquidity level, the more likely it will pay dividends to shareholders. However, when a company's condition prioritizes the fulfillment of short-term debt, operational costs, and sudden cash need, it tends to reduce the dividend rate distributed to shareholders (Hartono & Matusin, 2020;Singla & Samanta, 2018;Wahjudi, 2020).…”

“…The study of Alzomaia & Al-Khadhiri ( 2013 Singla & Samanta (2018); and Yusof & Ismail (2016) showed that firm size positively affects dividend policy. According to Hartono & Matusin (2020); Kaźmierska-Jóźwiak (2015); and Lestari (2018), the firm size negatively affects dividend policy. Based on what has been described, the seventh hypothesis is formulated as follows: H 7 : Firm size affects dividend policy.…”

“…However, the predictors capable of affecting the dividend policy are growth in net assets, liquidity, and financial leverage. The study of Hartono & Matusin (2020) examined 21 real estates, property, and building construction companies listed on the Indonesia Stock Exchange by combining the consistent and inconsistent dividend distribution. Furthermore, the analytical tool used is an unbalanced panel data regression, which eliminates the object of observation unable to distribute dividends through the ordinary least square techniques.…”