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Determinants of Dividend Policy: A Sectoral Analysis from Pakistan
Article (PDF Available) · January 2013 with 2,199 Reads
Cite this publication
Ahmed Arif
3.4 · University of Bologna
Fatima Akbar
Abstract
The present study is an endeavour to evaluate the determinants of dividend policy. The study has been conducted on non- nancial sector of Pakistan.
There are ve important determinants identi ed in this study i.e. pro tability, size, tax, investment opportunities and life cycle stage of rm. A sample of
174 non- nancial rms listed on Karachi Stock Exchange for the period of 2005 to 2010 has been chosen for this study. The researcher has analyzed the
relationships of variables rstly for overall non- nancial sector and further for sub sectors of non- nancial sector. Over all sector analysis has been
performed through panel data analysis. Further to check sectoral differences, sector wise regression analysis has been performed. The results have
identi ed pro tability, tax, size and investment opportunities as most in uential determinants of dividend policy. However, there is a lack of stable
dividend policy in the market.
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Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013
Determinants of Dividend Policy: A Sectoral Analysis from Pakistan

*
Ahmed Arif , & Fa ma Akbar2
1
1
Shaheed Zul kar Ali Bhu o Ins tute of Science and Technology, Street # 09, Plot # 67,
Sector H-8/4, Islamabad, Pakistan. 2Fa ma Jinnah Women University, The Mall, Rawalpindi, Pakistan.
*lakhvera@gmail.com
Abstract
The present study is an endeavour to evaluate the determinants of dividend policy. The study has
been conducted on non- nancial sector of Pakistan. There are ve important determinants iden ed
in this study i.e. pro tability, size, tax, investment opportuni es and life cycle stage of rm. A sample
of 174 non- nancial rms listed on Karachi Stock Exchange for the period of 2005 to 2010 has been
chosen for this study. The researcher has analyzed the rela onships of variables rstly for overall
non- nancial sector and further for sub sectors of non- nancial sector. Over all sector analysis has
been performed through panel data analysis. Further to check sectoral di erences, sector wise
regression analysis has been performed. The results have iden ed pr o tability, tax, size and
investment opportuni es as most in uen al determinants of dividend policy. However, there is a lack
of stable dividend policy in the market.
Key words: Dividend, Pro tability, Size Tax, Investment Opportuni es, Life Cycle Stage.
__________________________________________________________________________________

1. Introduc on
Financial managers are generally supposed to take di erent important decisions like investment
por olios, product development, and nancing with the objec ve to increase market value of the
rm (Afza & Mirza, 2011). Distribu on of generated pro ts is another essen al decision of
management. Managers have to decide carefully that how much amount of earnings should be
distributed to shareholders and how much por on of earnings should be reinvested in the business.
While, making such decision, it is important to concentrate on maximiza on of shareholder wealth.
The dividend is not just a source of income for shareholders, but act as an indicator to judge the
performance of the rm (Al-Malkawi et al., 2010). Dividend policy indicates the level of earnings paid
to shareholders on their investment. Dividend policy is a cri cal decision because it relates with
other nancial and investment decision (Abor & Bokpin, 2010).
Dividend policy refers to decision of management about the por on of income that is given to
shareholders in the form of dividend and, this is an arguable issue for nancial managers for more
than 50 years. Many theories have been presented. Researchers commenced debate a er Miller &
Modigliani (1961) argument that dividend policy is irrelevant to rms’ value. It is rather a ected by
investment policies of the rm under perfect market assump on. Gordon (1963) negated the
argument of Miller & Modigliani by presen ng his Bird in hand theory. Increase in dividends can
in uence shareholder wealth posi vely because of imperfect informa on and uncertainty in the
market (Gordon, 1963). Later on, many other theories contributed in literature i.e. signalling theory
of Bha acharya, (1979) which explain under asymmetry of informa on dividends can convey
informa on about the future prospects of a rm. Easterbrook (1984) presented Agency Cost Theory
that suggests higher dividends can be used as a tool to mi gate the agency problems of rms. It
d h il bl f f h h d f ‘ C h l
https://www.researchgate.net/publication/257924952_Determinants_of_Dividend_Policy_A_Sectoral_Analysis_from_Pakistan h i’b & 3/45
decreases the available free from the hands of managers. ‘Free Cash Flow Hypothesis’ by Jensen &
Micheal (1986) argues that dividends are paid a er investment decisions. Whereas ‘Tax Preference
Theory’ of Miller & Scholes, (1978) says tax factor divide investors into di erent clientele. Baker &
Wurgler (2004) proposed ‘Catering Theory of Dividend’ which posits that managers tend to give
incen ves to the investors according to their expecta ons to cater them.
This dividend policy has been of great interest for the researchers and extensive empirical research
has been carried out to iden fy the poten al factors that a ect the dividend policy of the rm.
However researchers are s ll unable to reach at a consensus in this regard (Kim & Jang, 2010). It has
16

remained a puzzle for nancial economists (Black, 1976). The emerging consensus is that dividend

puzzle cannot be solved with any single factor (Abor & Bokpin, 2010).
Most of the previous studies are focused on developed markets. There is a lack of studies on
dividend policy in developing markets, especially in Pakistan. The present study is an a empt to ll
this exis ng gap in literature by studying dividend policy of Pakistani rms, when the poli cal and
economic situa on is unstable. This study not only brings up to date informa on and expand the
prior researches but it is also helpful in further explaining the understanding of dividend policy of
Pakistani rms. The objec ve of, this study is to nd the impact of pro tability, size, investment
opportuni es, tax and life cycle stage on dividend policy.

1.1. Capital Market of Pakistan
In Pakistan there are three stock markets, i.e., Islamabad Stock Exchange, Lahore Stock Exchange
and Karachi Stock Exchange. The Karachi stock Exchange is the biggest exchange among three
markets. KSE was established in 1947, currently with the lis ng of 651 companies with the m arket
capitaliza on of $26.48 billion and listed capital of $ 9.56 billion. KSE is a hub of informa on for
investors and play important role in maintaining discipline. Informa on about de-listed companies
and listed companies is publicly provided. Every year Karachi stock exchange announces annual
ranking of listed companies based on ‘good performance’ (Khan, Burton, & Power, 2011). KSE was
the sixth best performer of the year 2007 among developing markets. KSE 100 index reached
to14075.83 in 2007 and 1366.44 in the year 2001 (Afza & Mirza, 2011). In March, 2002 SECP
introduced code of corporate governance to ensure transparency and accountability in the
opera ons of publicly listed companies. Reforms emphasized on disclosing of internal and external
audit reports and proceedings of execu ves in order to protect the shareholders' rights (SECP, 2003).
The dividend payout ra o is low in Pakistan as compared other developing markets. The dividend
payment are considered net pro ts a er tax and generally depends on the availability of surplus
funds a er considering expenditures and growth needs (Mehar, 2007). Commonly, in Pakistani rms
shareholders are family members. Ownership is concentrated resultantly discrimina on prevails.
Directors enjoy a big amount o f salaries and extra bene ts. This leads to reduc on in earnings of
rms that a ect the dividend payouts. Small shareholders are mostly a ected by concentra ng
ownership (Arif et al., 2011).
Prior researchers who have studied the Pakistani market posit that Pakistani rms have
Prior researchers, who have studied the Pakistani market, posit that Pakistani rms have
concentrated ownership structure. It plays an important role in determining dividend policy. Further
current earnings a ect posi vely the dividend policy, whereas investment opportuni es and
leverage are nega vely related to dividend policy. Pakistani rms hesitate to announce dividend,
when they earn high pro ts because of taxes. Capital gains are tax exempted, however dividends are
taxed. Therefore shareholders like to receive stock dividends rather than a cash dividend in order to
avoid taxes.

1.2. Determinants
Firm’s dividend policy of
is Dividend Policy
the most important nancial decision and responsibility of management.
Dividend policy is the decision of how much por on of earning should be transferred to the
shareholders in the form of dividends. It re ects the distribu on of pro ts between dividends to
stockholders and reinvestment in the rms (Droms & Wright, 2010, p. 260). The basic objec ve of
dividend policy is to maximize the wealth of owners (shareholders). It is devised not only to raise the
share price in the short run, but the long term objec ve is to maximize the owner’s wealth (Brigham
& Gapenski, 1998). Although researchers have iden ed several determinants of dividend policy.
However, the present study is focused on few of them.

1.2.1. Pro tability
Pro tability is de ned as the capability of the en ty to produce pro ts. Pro tability plays a v ital role
in determining dividend policy of the rm. Researches commonly suggest a posi ve rela on of
17

pro tability and dividend policy. Stability of current and future earnings is key determining factors of
dividend policy (Baker et al., 2006). Investors are more inquiring to know the pro tability of the
rm, because it determines the return on their investment (Mistry, 2011) .
Pro tability is a cri cal factor in making a decision of dividends around the world. The high level of
pro ts increases the propensity to pay more dividends , when the low level of investment
opportuni es and the debt ra o exist. Because investment opportuni es and debt can decrease the
dividend payouts (Truong & Heaney, 2007). On the other hand, in some cases when rm’s pro ts are
increased then dividends are a ected nega vely. Because the rms invest their surplus earnings in
their growth rather than distribu ng dividends (Okpara & Chigozie, 2010).

1.2.2. Size
Generally larger rms tend to pay higher dividends because of stable earnings. Researchers have
iden ed posi ve rela onships between size and dividend payouts. Large size rms can obtain
external nances because of their high asset value and be er growth perspec ves, therefore
dividend payments are not reduced with high investment opportuni es (Afza & Mirzan 2010). On
the contrary, in some countries the size of the rm has a nega ve in uence on dividends, large rms
want to meet investment needs internally rather than externally. They hold funds under their
control rather than distribu ng dividends (Ahmed & Javed , 2009).
Fatemi & Bildik (2012) observed the decreasing pa ern of dividends on a sample of more than
Fatemi & Bildik (2012) observed the decreasing pa ern of dividends on a sample of more than
17000 companies from 33 from countries u lizing data from 1985 to 2006.Their ndings revealed
that the percentage of dividend payers reduced sharply from 87% to 53% over the 22-year of
analyzing period and this tendency is consistent and persistent across all 33 countries. The declining
percentage of payers in developed markets are, the US (47%), Australia (67%), the UK (56%), Canada
(60%), and Germany with (45%). In addi on, the existence of the stock markets and availability of
expanded opportuni es for sale and repurchase of shares has decreased the importance of
dividends in the rms. Further results iden ed cross-sec onal determinants of dividend policy.
Large size, high pro tability and low growth opportuni es have posi ve rela onships with
propensity to pay dividends. According to the authors' sugges on, the payout policies of smaller and
less pro table rms with more investment opportuni es are major factors responsible for the
decline in dividend behavior.

1.2.3. Tax
Taxes a ect both shareholders’ income as well as corporate earnings. High dividend taxes reduce
the demand for dividends. Higher tax rates on dividend income than capital gains, will decrease the
dividend payout ra os (Casey & Dickens, 2000).
Irrelevance theory ignores the tax factor in evalua ng dividends. What will happen if this assump on
is relaxed? Korkeamaki, Liljeblom, & Pasternack (2010) empirically studied the impact of the tax-
reforms in payout policy of companies listed on Helsinki Stock Exchange Finland in the year 2003 to
2006.Tax reforms were introduced in Finland in 2004, which adversely a ected the Finish rms.
Before reforms dividends were tax free for domes c investors under the full imputa on system, but
it was replaced by introducing par al double taxa on of corporate pro ts. Results reveal that the
propensity to pay dividends reduces across all rms, while it was high in the old tax system. Free
cash ow and imputa on system of tax have signi cant posi ve rela on with dividend payout ra o,
as it enables rms to pay higher dividends (Chen & Dhiensiri ,2009)
Tax divides investors into di erent clientele. Investors in a high tax bracket prefer to hold stocks of a
rm that pays low dividends and lower tax bracket prefer stock of high dividend paying rms. In
response to high tax rates, rms use to follow the stock repurchase op ons i nstead of paying cash
dividends (Lee et al., 2006).

18

1.2.4. Life-Cycle Stage
The life cycle theory suggests that dividend payout is posi vely related to the maturity of rms.
When a rm turns to maturity stage from growth stage over me, its nancial features like size,
pro tability, growth opportuni es, debt and capital structure change remarkably. Mature rms with
high earned surplus ra o and few growth prospects are in a be er posi on to start and increase
dividends (Shin et al., 2010).
Afza & Mirza (2011) conducted a study to test the m aturity hypothesis in Pakistani rms and found a
Afza & Mirza (2011) conducted a study to test the m aturity hypothesis in Pakistani rms and found a
non-linear rela onship between dividend and maturity of the rm. Results reveal that tendency to
pay high dividends remain up to 20 years ,with the increasing rate of 3% per year. It starts to decline
a er 20 years at a rate of about 0.10%, and remains ll the age of 40 years. According to author
main reasons behind this decline is the e ect of compe on among companies. Funds are allocated
to R&D projects and promo on campaigns. But a er that company starts paying high dividend, as it
enters into new maturity level with low capital expenditure more retained earnings. Mature rms
have high pro tability and low growth opportuni es, therefore they may face higher reten on cost
because of the free cash ow problem and rms solve their free cash problems by increasing
dividend payout ra os (Afza & Mirza, 2010).
Life cycle factor is a ec ng dividend policy in emerging as well as developed markets. Denis &
Osobov (2008) conducted a compara ve study to examine the dividend behavior of rms in six
countries which includes UK, US, Germany, France, Japan and Canada. The result shows that large
and pro table rms tend to pay dividend. Further, results indicate that almost in every country, the
dividend policy is a ected by, pro tability, growth opportuni es, rm size and the
earned/contributed equity mix. Results are consistent with life cycle theory of dividend .The rm
pays less dividend in the ini al stage of growth. As a rm matures propensity to pay dividend also
raises. Further they report that the propor on of dividend payers decreases between 1998 and 2002
in all six countries except Japan and Germany, because of increase in lis ng of small rms with high
growth opportuni es but with low pro tability.

1.2.5. Investment opportuni es
Investment opportuni es have been stated nega vely related to the dividend decisions. Agency
theory supports this rela onship, because rms are le with less free cash ow when more
investment opportuni es are available. Firms have to keep more funds for this purpose, therefore
the dividend payout level is decreased (Easterbrook, 1984). Empirical studies support this
rela onship (Patra et al., 2012; Kangarlouei et al., 2012). In emerging economies , investment
opportunity is a major determinant of dividend policy. It a ect dividend policy payout nega vely ,as
rms prefer to retain funds to invest in future investments and projects that have posi ve net
present value (Abor & Bokpin, 2010).
Mi on (2004) views that there is a stro ng nega ve rela on between dividend payouts and growth
opportuni es in a country where shareholders' rights are well protected. Because well protected
investors allow their rm to retain cash with the expecta on that they will get be er returns in
future from good projects. Although , managers are very reluctant to reduce dividends ,but growing
rms require addi onal funds to nance growth needs, therefore a major part of the earnings is kept
for this purpose by decreasing the dividend payments (Amidu & Abor, 2006).

2. Theore cal Framework and Hypotheses
This sec on comprises of rela onships and hypothesis of variables. Pro tability, size, tax, life-cycle
stage, and investment opportuni es have taken as independent variables and dividend yield as
dependent variable.
Pro tability measures the rms' ability to generate earnings. Pro tability plays a vital role in
determining dividend policy of rms. Various studies suggest posi ve rela ons between dividend
and pro tability. As, pro table rms generally possess more free cash ow and more inclined to pay
higher dividends. (Denis & Osobov, 2008; Ahmed & Javed, 2009 ; Shubiri, 2011; Kim & Jang, 2010;
19

Patra et al., 2012). Hence based on previous researches pro tability following hypothesis is
proposed

H1: Pro tability is posi vely related to dividend payout.

Size of rm is commonly considered as a signi cant determinant of dividend policy. Previous
researches posit that generally large rms with stable earnings are likely to pay high dividends
compared to small rms, as large rms face less nancial constraints. Size is measured as natural log
to total assets. Many recent studies found a posi ve rela onship between size and dividend payout
(Shubiri, 2011; Thanatawee, 2011; Fatemi & Bildik, 2012). In the Pakistani context there are mixed
opinions regarding the size of the rms. Therefore H2 is formulated as;

H2: There is a posi ve rela onship between the size of the rm and dividend payout policy.

Tax liability causes reduc on in the income of the shareholders. Tax system varies country to
country. In some countries dividends are exempted, but in some countries dividends are taxed at
higher rates than capital gains. Empirical studies have fo und a nega ve rela on between o f high tax
rates and dividend payout levels (Korkeamaki et al., 2010). Tax system of Pakistan is di erent
compared to other countries, as there was no capital gains tax ll 2010. In order to know the
rela onship between tax and dividend H4 hypothesis is proposed as:

H3: There is a nega ve rela onship between tax and dividend payout.

Investment opportuni es of the rm have been presented to nega vely a ect dividend policy,
because rms with addi onal growth opportuni es are more likely to use funds for investment
purposes and are less likely to pay out cash dividends. Many researches support the nega ve
rela onship of investment opportuni es and dividends (Mi on, 2004; Denis & Osobov, 2 008;
Kangarlouei et al., 2012). A few studies suggest posi ve rela onship . (Kim & Jang, 2 010). Overall,
investment opportuni es are expected to a ect dividend policy nega vely.

H4: There is a nega ve rela onship between investment opportuni es and dividend payout.

The life cycle theory proposes posi ve rela on of rms’ maturity and dividend payments. Empirical
ndings document that matures rms generally holds a higher retained earnings and lower
investment opportuni es. The ra o of retained earnings to total equity can be used as a proxy to
measure rm’s maturity (Denis & Osobov, 2008; Shin et al., 2010). Only a single study has been
found so for on life cycle stage in Pakistani context, that suggest a non-linear rela onship between
maturity of the rm and dividend policy. Considering prior research results and future research
sugges ons of (Afza & Mirza, 2011) , following hypothesis is proposed

H5: There is a posi ve rela on between the life cycle of the rm and dividend payouts.

Dividend indicates income of the shareholders on their investment. Dividend payout ra o (DPR)
measured by dividends divided by net income (Thanatawee, 2011). DPR represents dividend policy
for the study.

20

Figure 1. Theore cal Framework

21

3. Research Methodology
The methodology employed in the present study has been elaborated below.

3.1. Sources of Data
Data for the measurement o f variables has been collected using various secondary sources.
Following are the main sources of data;
Analysis reports of State bank of Pakistan
Analysis reports of KSE
Annual reports of rms
Business recorder website

3.2. Nature of Data
The nature of data for this study is a penal data. In penal data also called longitudinal data, N
( rms) units are observed for T me. It is a combina on of me series and cross sec onal data. The
data has been collected for nal sample of 174 non- nancial rms for the period o f six years from
the year 2005 to 2010. A major por on of data for studying period has been taken from nancial
statements analysis report of non- nancial sector of SBP and it is annual data.

3.3. Popula on and Sample
Following are the main characteris cs and sampling techniques which have been used in the
study.

3.3.1. Sample Characteris cs
Popula on of the study is KSE. Karachi stock exchange has two major sectors i.e. (1)
Financial sector, and (2) Non- nancial sector. This study focuses on non- nancial sector. Financial
sector has been excluded from study as their nancial repor ng standards are di erent from rest of
non- nancial rms. Non- nancial sector has been targeted only. A sample of 214 non- nancial rms
have been drawn for the study, out of which 40 rms have removed because these rms had
become defaulters due con nuous loss for past few years. Finally, those rms have been retained
that are present in nancial statements analysis report of SBP and KSE for the period of 2005 to
2010 A lt 174 l th t i l t f KSE
2010. As a result 174 rms are le that covers non- nancial sector of KSE.

3.3.2. Sampling Technique
Propor onate random sampling has been used to draw our sample. It involves dividing
popula on into sub homogeneous subgroup and nally selec ng simple random sample from each
sub group. It assures representa on of all sub groups (Research Methods Knowledge, 2006). There
are total 459 non- nancial rms listed on KSE, out of which 214 rms were drawn as a sample. 40
rms have been excluded from sample because they were defaulters declared in KSE annual report.
Formula:
n= N /1+N (e)2
N=459 non- nancial rm
e= 0.05
n= 459/1+459(0.05)2
n= 213.74

22

3.4. Methods of Analysis
Di erent sta s cal tools have been used for the analysis of this study. The rela onship
between dividends and other nancial variables has been examined by applying sta s cal tools. The
present study has used two so wares for analysis i.e. STATA 10 and SPSS 17. Fixed e ect and
random e ect models are commonly used models for panel data analysis. STATA has been used for
common, xed e ect and random e ect analysis, whereas, SPSS has been used for analysis of
correla on as well as regression analysis to check the sectoral di erences.

3.5. Opera onal De ni ons
Variables are opera onally de ned as follows:

3.5.1. Dividend Payout Ra o (DPR)
DPR has been used as the dependent variable in the study. The dividend is de ned as a
por on of a rm’s net earnings, which is paid among the shareholders (Khan & Jain, 2007, p. 19.3).
DPR is calculated using formula of total amount of dividend divided by Net income.

3.5.2. Pro tability
Pro tability is de ned as the capability of the en ty to produce pro ts and is used as a
measure of the rm’s performance It is a primary indicator of to declare dividends ( Mistry 2011)
measure of the rm s performance. It is a primary indicator of to declare dividends ( Mistry, 2011).
ROA is used as a proxy to measure pro tability of the rm. It is calcuted by dividing EBIT to total
assets.

3.5.3. Size
Firm size is considered an important factor. Generally large rms are supposed pay more
dividends. The natural logarithm of total assets is used as a proxy to measure the size (Kim & Jang,
2010).

3.5.4. Tax
Tax is a levy imposed by government on corpora ons against their pro ts (Investopedia).
High tax rates normally discourage rms as well as shareholders for high dividends. Tax rate has
been calculated as annual tax divided by EBT (earnings before tax) (Mehar, 2007).

3.5.5. Investment Opportuni es
Investment o pportuni es refer to the present and future growth opportuni es available to
rm. The free cash ow hypothesis explains that rms retain their earning to nance growth needs
(Jensen & Micheal, 1986). Market to book values of equity is used as a proxy to measure investment
opportuni es (Abor & Bokpin, 2010).

3.5.6. Life Cycle Stage
Life cycle stage suggests that rms in maturity stage have more accumulated pro ts and
such rms pay high pro ts. Life cycle stage is measured by the ra o of retained earnings to total
shareholders’ equity ( Kim & Jang, 2010).

4. Results And Discussion
This sec on contains the sta s cal results and discussion on obtained results. Iden ed
rela onships of variables have been discussed.
4.1. Descrip ve Analysis
Table 1 shows the descrip ve sta s cs of dependent and independent variables, which
include mean standard devia on, minimum and maximum values. The mean values of DPR
pro tability, size, tax, inv. Op., and LCS are 0.36554, 0.08853, 14.15305, 0.20467, 7.63323, and
0.053687 respec vely. This implies that the average dividend payout across the sample is 36.55
23

percent. The mean value of pro tability suggests that non- nancial rms earn 8.853% of pro ts on
their assets. The mean value o f size implies that increase in the value of the asset is 14.15305. Mean
value for tax indicates that 20.467 % of pro ts are paid as tax by non- nancial rms. The varia on in
DPR over six years across the sample measured by standard devia on is 3.91787. Inv. Opp., has a
highest standard devia on among all the variables i.e.21.01916. Remaining independent variables,
pro tability, size, tax and LCS have a standard devia on of 0.1307, 3.08715, 1.22755, and 6.28336
respec vely
respec vely.

4.2. Correla on Analysis
Table 2 of correla on matrix shows how variables are correlated with each other. The sign
with the values indicate rela onship between variables. The coe cient correla on between
pro tability and DPR is (0.0232) indica ng posi ve rela onship. This means that with the increase in
pro tability, the payout ra o also increases. The weak posi ve rela onship of DPR with pro tability
indicates that majority o f non- nancial rms do not transfer their earnings to shareholders in the
form of dividend. The coe cient correla on between size and DPR is (0.0073) showing posi ve
rela onship.
The coe cients correla on value between tax and DPR is (-0.0042), indica ng nega ve
rela onship. The results suggest that an increase in tax rate causes reduc on in payout ra o. This
implies that rms in growing stage do not decrease dividends. LCS is nega vely correlated with DPR ,
indica ng that when rms turn into maturity, dividend payout decreases.

4.3. Penal Data Analysis
The common e ect, xed e ect and random e ect models have been applied to penal data
to check the e ect of each independent variable on dividend payout ra o.
All three models common, xed, and random e ect have been applied to examine the e ect
of independent variables on DPR (dependent variable), but all models show insigni cant results, as
‘p- value more than 0.05 indicates their insigni cant rela onships.
The insigni cant values of Common e ect, xed e ect and random e ect mo del are (Prob >
F = 0.9126), (Prob. > F = 0.9681), and (Prob. > chi2 =0. 9402) respec vely. Hence all hypothesis of the
study stand rejected here. Unsa sfactory results have been o btained; therefore the rela onship of
independent and dependent variables further has been tested on sectoral basis.

4.4. Sector Wise Regression Analysis
SPSS so ware has been used to examine the sectoral di erences of dividend policy based
on pro tability, size, tax, investment opportuni es and life cycle stage, and to know whether these
variables in uence dividend payout in same direc on across all sub sectors non- nancial sector or
not. Regression test has been applied to see sectoral di erences. The following tables are the results
of regression model for di erent sectors.
The table 6 shows regression results of R, R2, Adjusted R2, model signi cance, beta
coe cient and signi cance of each variable with the dependent variable. R shows correla on of all
independent variables with the dependent variable. Here the value of R is 0.531. R2 shows
magnitude of the rela onship. The varia on in the DPR caused by all independent variables is 28.2
%. The results also show value of F-sta s cs for the null hypothesis. It indicates that null hypothesis
is not supported (F=5.180, P< 0.05), because there is at least one of the factors of dividend policy
which are related to the DPR.
Pro tability has a signi cant posi ve rela onship with the DPR, as the sign of beta is posi ve
and t-sta s cs are signi cant (3.072) and sig. value (< 0.05), therefore H1is supported. As the rm’s
earnings increase the dividend payout will also increase.
H1: Pro tability is posi vely related to dividend payout. (Supported)
24

Beta value of ( -0.010) and t-sta s cs (-0.082) sugges ng nega ve rela onship of size with
the DPR. It es mates that there would be 1.0% nega ve change in the DPR with a unit increase in
size of rm. It does not support the H2. Large size rms can focus on reten on and use funds to meet
nancial needs instead of distribu ng in dividend.
H2: There is a posi ve rela onship between the size of the rm and dividend payout policy. (Not
Supported)
A nega ve sign of beta (-0.392) and t-sta s cs (-3.072) indicates a signi cant nega ve
rela onship of tax with DPR. The H3 is supported here. An increase in tax rate can decrease the
payout ra o.
H3: There is a nega ve rela onship between tax and dividend payout. (Supported)
Investment opportuni es have posi ve and insigni cant rela onship. Beta value is (0.22)
and sig. value is (0.867) .The posi ve rela on of investment opportuni es does not support the H4.
H4: There is a nega ve rela onship between investment opportuni es and dividend payout. (Not
Supported)
Surprisingly LCS has nega ve but insigni cant rela onship. Beta value is (-0.076) and t-
sta s cs is (-0.715). Here H5 is not supported. It means mature rms prefer to retain earnings rather
than paying dividends
H5. There is a posi ve rela on between the life cycle of the rm and dividend payouts. (Not
supported)
The above iden ed rela onships infer that in chemical sector dividend policy is signi cantly
a ected by pro tability and tax variables. Pro tability is cri cal determinant of dividend policy. The
tax a ects nega vely because tax payment decreases the earnings of the rm and leaves them with
low amount of net earnings.
Table 7 shows regression results of the food sector of KSE. The values of R, R2, Adjusted R2,
F-sta s cs and signi cance of the model are 0.35, 0.125, 0.092, 3.762 and 0.003 respec vely. The
model explains 12.5% of varia on in DPR caused by all independent variables.
The sign of beta shows a posi ve rela onship of all variables except LCS. Pro tability has a
posi ve but weak signi cant rela onship with the DPR. Here H1is par ally supported. The beta value
of pro tability is (0.194) and t-sta s cs is (1 .72). With the increase in the amount of pro t of rm
increase, causes an increase in the payouts.
H1: Pro tability is posi vely related to dividend payout. (Par ally Supported)
The value of beta for size (0.194) and t-sta s cs value (0.454) par ally supports H2. Large
size rms possess high cash ows and have a prac ce to pay dividend.
H2: There is a posi ve rela onship between the size of the rm and dividend payout policy . (Par ally
Supported)
Tax shows posi ve and insigni cant rela onship with DPR. The beta value (0.194) and t-
sta s cs (0.817) do not support the e xpected nega ve rela onship between tax and dividend
payouts.
H3: There is a nega ve rela onship between tax and dividend payout. (Not Supported)
The result indicates a posi ve rela onship between investment opportuni es and DPR, with the
beta coe cient of (0.173) and t-sta s cs (1.468). The DPR is increased by 17.3% with a unit increase
in investment opportuni es. It does not support the H4.
The LCS suggests a nega ve and insigni cant rela onship with DPR. The beta value (-0.072)
and t-sta s cs (-0.876) do not support the expected H5, that mature rms tend to pay high
dividends.
H5: There is a posi ve rela on between the life cycle of the rm and dividend payouts. (Not
Supported)
The table 8 explains regression model of general industry sector. The value of R2, 0.530,
indica ng 53% of variability in DPR explained for by ve independent variables. The value of
Adjusted R2 is 0.432. 43.2% of the variability in DPR of rms in general industry due to the ed
25


model. The value o f F-sta s cs is 5.416. Here the null hypothesis is not supported. This suggest that

at least one of the factors of dividend policy relates to the DPR of rms in general industry sector
The pro tability has a posi ve but an insigni cant rela onship with DPR. The beta value of
pro tability is (0.05) and t-sta s cs are (0.254), which par ally support the H1.That pro table
company is inclined to pay dividends.
H1: Pro tability is posi vely related to dividend payout. (Par ally supported)
Size of rms shows nega ve rela onship and insigni cant with DPR. Beta value is (0.0238)
and t-sta s cs is (1.388). The results do not support H2.
H2: There is a posi ve rela onship between the size of the rm and dividend payout policy. (Not
supported)
Tax shows nega ve and signi cant rela onship with the beta value of (-0.600) and t-
sta s cs (4.166). Results strongly support H3. High tax rates cause a reduc on in payouts.

The results of investment opportuni es show posi ve and insigni cant rela onship. Beta
value is (0.254) and t-sta s cs is (1.669). The results do not support the H4. Firms in growth are more
investment opportuni es are not inclined to pay.
H4: There is a nega ve rela onship between investment opportuni es and dividend payout. (Not
supported)
LCS shows posi ve and insigni cant associa on with the DPR. The value of beta is (0.256)
and the value of t-sta s cs is 1.298 par ally supports the H5, that rms in maturity stage pay high
dividends due to availability of more retained earnings.
H5: There is a posi ve rela on between the life cycle of the rm and dividend payouts. (Par ally
Supported)
Overall in the general industry tax has a strong nega ve impact of dividend policy of rms.
Table 9 shows the regression model for the electricity sector. The values of R, R2, F and
Adjusted R2 are 0.855, 0.730, 12.990 and 0.674, respec vely. The value of R2 shows that the
varia ons in the value of DPR caused by a set of independent variables are 73%. Value o f F-sta s cs
(12.990) does not support the null hypothesis. It shows that at least one of the factors of dividend
policy relates to the DPR of rms in electricity sector.
The results show that pro tability has nega ve but insigni cant rela onship with DPR as
shown by the beta value (-0.15)1 and t-sta s cs (-1.098). These results do not support H1.
H1: Pro tability is posi vely related to dividend payout. (Not supported)
Size has a posi ve and signi cant rela onship with the DPR. That can be seen from the beta
value of (0.305) and t-sta s cs (2.214). This supports H2, that the size has a posi ve associa on with
the DPR. Large size rms pay high dividend due to availability of free cash.
H2: There is a posi ve rela onship between the size of the rm and dividend payout policy.
(Supported)
Beta values and t-sta s c shows a signi cant nega ve rela onship of tax variable with the
DPR, the value of beta is (-0.249) and signi cant value of t-sta s cs is (-2.283). It supports the
hypothesis of tax that higher tax rates, the lower the dividend payout.
Investment opportuni es have surprisingly shown a posi ve and signi cant rela onship with
Investment opportuni es have surprisingly shown a posi ve and signi cant rela onship with
the DPR. Its beta value is (0.730) and t-sta s cs are (5.547) that indicate a highly signi cant
associa on of investment opportuni es and DPR. These ndings do not support the H4 for
investment opportuni es. Firms pay high dividends in growth stage to a ract investors.
(Not Supported)
LCS has a posi ve but an insigni cant rela onship with DPR. The beta coe cient value is
(0.14) and t- sta s cs (0.120).The posi ve sign par ally supports the H5 that there is a posi ve
26

associa on of dividend payout with maturity of the rm. Mature rms have stable earnings and
prefer to pay dividend to reduce the free cash ow problem.
H5. There is a posi ve rela on between the life cycle of the rm and dividend payouts.
(Par ally Supported)

4.5. Discussions
This study has examined the e ect of pro tability, size .Tax, investment opportuni es and
life cycle stage with the dividend policy of non- nancial rms listed on KSE.
From the above results it has been found that the determinants of dividend policy are
unpredictable in overall non- nancial sector. All variables show an insigni cant rela onship with the
dividend payout ra o. On the other hand when the rela onship was inves gated on a sectoral basis
these variables were signi cantly associated with a dividend payout ra o.
Pro tability has been found signi cantly associated with a dividend payout ra o. It measures
the performance of the rm. Financial theories generally suggest that the payment of dividends and
pro tability are posi vely related. Similar results have been posited by other studies that
pro tability is an important determinant of dividend policy (Baker et al., 2006; Kim & Jang, 2010).
Pro table rms transfer any increase in their earnings to shareholders. Pro tability increases the
rm’s ability pay more dividends. The majority of rms hesitate to transfer pro ts to shareholders in
Pakistan. More than 30 rms have been delisted from KSE due to strict rules of SECP and Ministry of
Finance for non-payment of dividend. Some of these companies chosen for the op on of delis ng
voluntarily as they were focusing on high reten on and reinves ng funds in business instead of
distribu ng their earnings to shareholders (Asif et al., 2011).
The posi ve rela onship of pro tability with dividend was very signi cant in chemical
sector. This indicates that in chemical sector pro tability is an important determinant of dividend
policy. Findings support the signalling theory of dividend policy (Bha acharya, 1979). Firms in
chemical sector have a prac ce of transferring their earnings to investors in the form of dividend.
These results are similar to many previous which support the idea that dividend is dependent on
pro tability of the rm; because pro table rms have more free cash ows and are inclined to pay
dividends (Denis & Osobov, 2008; Ahmed & Javed, 2009; Kim & Jang, 2010; Shubiri, 2011).
Sta s cal results show that size don’t in uence the dividend policy of rm in overall non-
nancial sector But in sector wise it has signi cant impact on dividend policy In the electricity
nancial sector. But in sector wise it has signi cant impact on dividend policy. In the electricity
sector of KSE it has been found that payment of the dividend depends on size of rm. Size is the
important determinant of dividend policy in this sector. Generally, large size rms have su cient
funds and less nancial constraints compared, therefore the propensity to pay a dividend is high.
These ndings of size are supported by (Thanatawee, 2011; Fatemi & Bildik, 2012). They suggest that
large rm have also easy access to external markets and such rms have high pro tability and low
growth opportuni es that increase the propensity to pay dividend. Large rms can use high dividend
to slove the agency prolems.These results contradict with the ndings of Afza & Mirza (2010) and
Ahmed & Javed (2009), who found a nega ve rela onship of size and dividend. They argue that large
rm prefers to keep fund with them to meet their nancing needs and to escape from costly
nancing.
Overall tax has an insigni cant rela on with the dividend for the whole sample of non-
nancial sector, but in sector wise analysis it has a strong impact on dividend payouts. The
insigni cant results are in line with the survey results of Khan et al. (2011) who found that
management does not care about the taxes. In sector wise analysis tax has a signi cant nega ve
rela onship with dividends par cularly in chemical, general industries and the electricity sector. This
supports the expected hypothesis of the study. The ndings are parallel to the tax factor theory
(Miller & Scholes, 1978). It can be inferred that higher taxes discourage rms to pay pay high
dividends. Similar ndings have been discussed by Korkeamaki et al. (2010) who observed the
nega ve impact of taxes on dividend in Finland. In Pakistan shareholders prefer stock dividends
instead of the cash dividend to avoid the tax burden (Khan et al., 2011). The nega ve rela onship
27

tax and dividend contradicts with the ndings o f Mehar (2007) who found a posi ve rela onship of

tax with dividends.
Investment opportuni es have shown a surprisingly posi ve rela onship with dividend
payouts in sector wise analysis, although it was insigni cant in the overall sector analysis. In the
electricity industry of Pakistan rms with high investment opportuni es tend to pay more dividends
to shareholders. The posi ve rela onship contradicts with many previous researches ( Abor &
Bokpin, 2010; Patra et al., 2012; Kangarlouei et al., 2012). These researchers were of the view that
investment opportuni es reduce the dividend payouts, as funds are undistributed for future growth
and investment purposes.
The posi ve results are consistent with the study of Kim & Jang, (2010). It implies that
companies with high investment opportuni es pay more dividends to a rac t investors and to avoid
any nega ve response of shareholders, further to maintain the goodwill of the rm. Under signalling
theory rms use dividends to signal their current a future performance to a ract the poten al
investors (Bha acharya, 1979).
It is concluded that rms with high investment o pportuni es tends to pay more dividends to
a ract the exis ng as well as poten al investors and to boost their trust of shareholders. Such
policies help the rms to reduce agency problem under the theory of agency cost (Easterbrook
1984).
Life cycle stage has been found insigni cant in overall analysis of non nancial sector as well
Life cycle stage has been found insigni cant in overall analysis of non- nancial sector as well
as sector wise analysis of non- nancial rms. This implies that in Pakistan maturity of rms does not
have any e ect dividend policy. Pakistani market has di erent characteris cs. Otherwise, mature
rms have high pro tability and low growth opportuni es, therefore they may face higher reten on
cost because of the free cash ow problem. Firms solve their free cash problems by increasing
dividend payout ra os (Denis & Osobov, 2008; Afza & Mirza, 2010; Thanatawee, 2011). There are
only 30 rms out of 174 rms , which consistently paid dividends for the year 2005 to 2010. Where as
remaining 83% have unstable dividend behavior. It indicates that majority rms do not follow stable
dividend policy. Such situa on suggests that agency problems can be seen in rms because of
reten on of pro ts. This creates a contradic on between the interests of shareholders and
management.

5. Conclusion
The objec ve of this study was to nd the poten al determinants of dividend policy and to
examine the sectorial di erences of non- nancial rms listed on Karachi Stock Exchange. The
ndings help in understanding of dividend behavior in Pakistan. The determinants for overall non-
nancial sector are unpredictable. All the variables show insigni cant results in overall analysis of
non- nancial sector.
However, in sectoral di erence it is found that Pro tability is an important determinant.
Firm's dividend policy in such sectors depends on pro tability. The tax was signi cantly nega vely
related with dividend policy of rms. Tax causes reduc on in dividends and discourage rms to pay
high dividends. Shareholders can prefer stock dividend to avoid the tax burden instead of a cash
dividend. The government should make tax friendly policies. This would be bene cial small investors
who bear the high tax burden, and it will help in discouraging high reten on of funds, because it
increases concentra on of wealth in the few hands of big investors. Large size rms possess more
resources and easy access to external markets.Therefore the large size rm pays high dividends due
to less nancial constraints. The posi ve and signi cant rela onship of investment opportuni es
with dividend indicates that rms in growing stage do not decrease dividend for investment
opportuni es . Such rms use high dividend payouts to a ract investors.
Pakistani market has di erent characteris cs as compared to developed and other
developing markets. Poli cal and economical factors are very dynamic. These factors have a strong
impact on the performance of the rm.
28

In the light of results this study it is concluded that pro tability, tax, size and investment

opportuni es are important determinants of dividend policy of non- nancial sector. It has been
found that rms generally do not follow stable dividend policy and are not reluctant to cut
dividends. In non- nancial sector, the majority of rms do not pay regular dividends. Firms should
follow stable dividend policies to a ract foreign and local poten al investors.

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30

Table 1: Descrip ve Sta s cs

Mean Std. Dev. Min Max N
DPR 0.3655 3.9178 -11.8620 109.9624 1044
Pro tability 0.0885 0.1307 -1.2358 1.7721 1044
Size 14.1530 3.0871 0 19.2486 1044
Tax 0.2046 1.2275 -9.1155 23.4029 1044
Inv. Opp. 7.6332 21.0191 0 238.1424 1044
LCS 0.0536 6.2833 - 96.6679 145.1234 1044

Table 2: Correla on Matrix
Pro tability Size Tax Inv. opp. LCS DPR
Pro tability 1.0000
Size 0.2022** 1.0000
Tax 0.0448 0.0103 1.0000
Inv. opp. 0.3288** 0.1166** 0.0413 1.0000
LCS 0.1113** 0.0070 0.0237 0.0117 1.0000
DPR 0.0232 0.0073 -0.0042 0.0180 -0.0251 1.0000
**Correla on is signi cant at the 0.01 level (2-tailed).

Table 3: Common E ect Model
Source SS df MS Number of obs. = 1044
Model 23.1452 5 4.6290 F( 5, 1038) = 0.30
Residual 15986.5715 1038 154013 Prob > F = 0.9126
Total 16009.7167 1043 15.3496 R-squared = 0.0014
Adj R-squared = -0.0034
Root MSE = 3.9245
DPR Coef. Std. Err. z P>|z| [95% conf. Interval]
Pro tability 0.6749 1.0064 0.67 0.503 -1.2999 2.6498
Size 0.0021 0.0402 0.05 0.957 -0.0768 0.0811
Tax -0.0160 0.0991 -0.16 0.872 -0.2105 0.1785
Inv. opp. 0.0020 0.0061 0.33 0.829 -0.0115 0.0143
LCS -0.0172 0.0194 -0.88 0.377 -0.0554 0.0209
_cons 0.2637 0.5713 0.46 0.645 -0.8574 1.3848

31

Table 4: Fixed E ect Model
Fixed –e ect (within) regression Number of obs. = 1044
Group variable: Company Number of groups = 174
R-sq: within = 0.0011 Obs. Per group: Min. = 6
Between = 0.0017 Avg. = 6.0
Overall = 0.0000 Max. = 6
Corr (u_i, Xb) = -0.0877 F(5,865) = 0.19
Prob. > F = 0.9681
DPR Coef. Std. Err. z P>|z| [95% conf. Interval]
Pro tability 0.3676 1.3593 0.27 0.787 -2.3003 3.0356
Size 0.0141 0.0604 0.23 0.815 -0.1044 0.1327
Tax -0.0141 0.1076 -0.13 0.895 -0.2253 0.1970
Inv. Opp. -0.0075 0.0122 -0.61 0.541 -0.0316 0.0166
LCS -0.0138 0.0205 -0.68 0.500 -0.0542 0.0264
Cons 0.1938 0.8675 0.22 0.823 -1.5088 1.8965

Table 5: Random E ect Model
Random –E ect (within) regression Number of obs. = 1044
Group variable: Company Number of groups = 174
R-sq: Within = 0.0004 Obs. Per group: Min. = 6
Between = 0.0069 Avg. = 6.0
Overall = 0.0014 Max. = 6
Corr (u_i, Xb) =0 (assumed) Wald chi2 (5) = 1.25
Prob. > F = 0.9402
DPR Coef. Std. Err. t P>|t| [95% conf. Interval]
Pro tability 0.6427 1.0429 0.62 0.538 -1.4014 2.6870
Size 0.0042 0.0423 0.1 0.923 -0.0787 0.0871
Tax -0.0164 0.0989 -0.16 0.871 -0.2100 0.1779
Inv. Opp. 0.0014 0.0066 0.22 0.835 -0.0115 0.0143
LCS -0.0165 0.0193 -0.85 0.393 -0.0543 0.0213
_cons 0.2420 0.6038 0.4 0.689 -0.9414 1.4255

Table 6: Regression Results - Chemical Sector
R R2 Adjusted R2 F Sig. Beta t-sta s cs Sig.
0.531 0.282 0.227 5.180 0.000
Constant -0.039 -0.240 0.811
Pro tability 0.397 3.072 0.003
Size -0.010 -0.082 0.935
Tax 0 392 3 722 0 000
Inv. Opp. 0.022 0.168 0.867
LCS -0.076 -0.715 0.477

32

Table 7: Regression Results - Food Sector
R 2
R Adjusted R2 F Sig. Beta t-sta s cs Sig.
0.353 0.125 0.092 3.762 0.003
Constant 0.540 0.454 0.651
Pro tability 0.194 1.770 0.079
Size 0.194 0.454 0.679
Tax 0.194 0.817 0.415
Inv. Opp. 0.173 1.468 0.144
LCS -0.072 -0.876 0.382

Table 8: Regression Results - General Industry
2
R R Adjusted R2 F Sig. Beta t-sta s cs Sig.
0.728 0.530 0.432 5.416 0.002
Constant 0.786 1.435 0.164
Pro tability 0.052 0.254 0.802
Size -0.023 -1.388 0.178
Tax -0.600 -4.166 0.000
Inv. Opp. 0.254 1.669 0.108
CS 0 2
https://www.researchgate.net/publication/257924952_Determinants_of_Dividend_Policy_A_Sectoral_Analysis_from_Pakistan6 1 298 0 20 40/45
LCS 0.256 1.298 0.207

Table 9: Regression Results - Electricity sector
R R 2
Adjusted R2 F Sig. Beta t-sta s cs Sig.
0.855 0.730 0.674 12.990 0.000
Constant -1.184 -2.583 0.16
Pro tability -0.151 -1.098 0.283
Size 0.305 2.214 0.037
Tax -0.249 -2.283 0.032
Inv. Opp. 0.730 5.574 0.000
LCS 0.14 0.120 0.906

33

Citations (9) References (37)
... Dependent variable in this study is dividend policy. Dividend policy in this study
measured by dividend per share [7] . ...
Determinants of corporate dividend policy in Indonesia

Article Full-text available Jan 2018
H S Lestari
View Show abstract
... Size is measured by taking natural logarithm of total assets (Azhagaiah and Priya,
2008;Shah and Khan, 2009;Shah and Shah, 2016). Similar to Arif and Akbar (2013)
andHassan et al. (2013), we use return on asset (i.e. earnings before income and taxes
divided by total assets) to calculate pro tability (PROF). ...
Impact of taxation on dividend policy: Evidence from Pakistan

Article Full-text available Jul 2017 · Res Int Bus Finance
Naimat U. Khan · Qurat Ul Ain Shah Jehan · Attaullah Shah
View Show abstract
... Consequently, examining the determinants of dividend policy has attracted signi cant
research interest over a period of time. There are several researchers that have carried out
this study (Duha, 2009;Nguyen, 2012;Rehman & Takumi, 2012; Arif & Akbar, 2013 ,
Maniagi, Ondiek, Musiega, Maokomba&Egessa, 2013Uwuigbe, 2013;Maladjian & El
Khoury, 2014;Ahmed & Imran, 2014;Oyinlola, Oyinlola & Adeniran, 2014;Bahaa,
2015;King'wara, 2015;and Bogna, 2015). Most of these studies concentrated on other
sectors of the economy with the petroleum sector receiving limited research attention. ...
Determinants of Dividend Policy of petroleum rms in Nigeria

Article Jun 2017
Dr. Zayol Patrick I · Mr. Mya Ayangealu Theophilus · Miss. Muolozie Mirian
View
... As already mentioned, the reason behind choosing a sample period before 2010 is
because capital gains taxation was imposed from July 2010 for the rst time in Pakistan.
The literature suggests that this taxation is likely to have had an impact on dividend
payouts (and the market response to news of company disbursements) especially in the
Pakistani context (Hamid et al., 2012; Gul et al., 2012; Arif and Akbar, 2013; Hassan et al.,
2013). For example, Hamid et al. (2012) analysed the impact of taxes on dividend policy
for a sample of 21 banking companies listed on the KSE for a period 2006–2010. ...
Share price behaviour around dividend announcements in Pakistan

Naimat U. Khan · Bruce Burton · David Power
View Show abstract
... Musiega at el. (2013) investigated the determinants of dividend policy for non- nancial
sector companies listed in Nairobi securities exchange, as they found that ROE,
Company's current earnings and companies rate of growth are positively correlated to
dividend decision policy. Arif and Akbar (2013) in their attempt to identify and evaluate
dividend policy determinants on non- nancial companies listed in Pakistan-Karachi
securities market, they identi ed that the most signi cant determinants to dividend policy
are attributed to pro tability, size, tax and investments opportunities. Hossain et al. (2014)
search into company speci c oriented factors impact on dividend payout ratio decision in
Dhaka Stock Exchange (Bangladesh) they found that company's pro tability re ect a
Dhaka Stock Exchange (Bangladesh), they found that company s pro tability re ect a
positive and signi cant effect on dividend payout ratio while earning volatility and
ownership do have a negative signi cant in uence on dividend payment decision and
factors such as growth opportunities, company's size and company's liquidity didn't
explain any change in dividend policy payment adopted by the company. ...
Apropos of Accounting Information Indicators as Determinants of Cash Dividend Policy

Decision: A Comparative Study on Amman Stock Exchange (2001-2013)
Article Full-text available Mar 2015
Thair A. Kaddumi · Qais A. Al-Kilani
View Show abstract
... They concluded that by paying dividends, the factors that increase the probability of the
rm are earning per share, pro tability and size of the rm while the growth opportunities
decrease the probability of the rms. Arif et al., (2013) conducted a research on the
determinants of dividend payout in case of non- nancial sectors by using sectorial
analysis in Pakistan. They used the data from 2005 to 2010 of KSE listed non- nancial
rms. ...
Determinants of Dividend Payout: Evidence from Financial Sector of Pakistan

Lamia Fahim · Muhammad Kashif Khurshid · Hina Tahir
View Show abstract
... ‫ﺍﻟﻣﺎﻟﻳﺔ‬Ardestani, et al., 2013; Arif and Akbar, 2013; Sanju et al., 2011; Mougoue, 2008;
Bhaduri and Durai, 2006; Black et al., 2000 ( . ‫ﺃﺷﺎﺭﺕ ﺍﺳﺎﺕ ﺩﺭ ﻭﻫﻧﺎﻙ ﺍﻻﺳﺗﺛﻣﺎﺭﻱ ﺍﺭ ﺍﻟﻘﺭ ﻭ ﺑﺎﺡ ﺍﻷﺭ ﻳﻌﺎﺕ‬
‫ ) ﺗﻭﺯ ﺑﻳﻥ ﻋﻼﻗﺔ ﻭﺟﻭﺩ ﻋﺩﻡ ﺇﻟﻰ ﻣﺛﻝ‬Deng et al., 2013; Irandoost et al., 2013 ( ‫ ﺇﻟﻰ ﺍﺳﺎﺕ ﺩﺭ ﺃﺷﺎﺭﺕ‬٬ ‫ﺣﻳﻥ ﻓﻲ‬
‫( ﺑﺎﺡ ﺍﻷﺭ ﻳﻌﺎﺕ ﺗﻭﺯ ﺑﻳﻥ ﺳﻠﺑﻳﺔ ﻋﻼﻗﺔ ﻭﺟﻭﺩ ﺍﻻﺳﺗﺛﻣﺎﺭﻱ ﺍﺭ ﺍﻟﻘﺭ ﻭ‬Kangarlouei et al., 2012; Daniel et al., 2010) .
...
The Effect of Dividends on the Investment Decision in the Light of the Financial Reporting
Quality-‫ﺃﺛﺭ ﺗﻭﺯﻳﻌﺎﺕ ﺍﻷﺭﺑﺎﺡ ﻋﻠﻰ ﺍﻟﻘﺭﺍﺭ ﺍﻻﺳﺗﺛﻣﺎﺭﻱ ﻓﻲ ﺿﻭء ﺟﻭﺩﺓ ﺍﻟﺗﻘﺎﺭﻳﺭ ﺍﻟﻣﺎﻟﻳﺔ‬
Nidal Zalloum
View Show abstract
Factors Affecting Dividend Payout in Pakistan's Textile Industry

Article Full-text available Aug 2014
Fatima Sadik
View
FAKTOR INKONSISTENSI PERUSAHAAN DALAM PEMBAYARAN DIVIDEN

Article Full-text available Nov 2017
Alfatur Devaki
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Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

remained a puzzle for nancial economists (Black, 1976). The emerging consensus is that dividend

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

model. The value o f F-sta s cs is 5.416. Here the null hypothesis is not supported. This suggest that

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

tax and dividend contradicts with the ndings o f Mehar (2007) who found a posi ve rela onship of

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

In the light of results this study it is concluded that pro tability, tax, size and investment

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

Kangarlouei, S. J., Motavassel, M., azizi, A., & Farahani, M. S. (2012). The inves ga on of the

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

Table 1: Descrip ve Sta s cs

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

Interna onal Journal of Business and Behavioral Sciences Vol. 3, No.9; September 2013

Determinants of corporate dividend policy in Indonesia

View Show abstract

Impact of taxation on dividend policy: Evidence from Pakistan

View Show abstract

Determinants of Dividend Policy of petroleum rms in Nigeria

Share price behaviour around dividend announcements in Pakistan

Article Full-text available Jan 2016

View Show abstract

Apropos of Accounting Information Indicators as Determinants of Cash Dividend Policy

View Show abstract

Determinants of Dividend Payout: Evidence from Financial Sector of Pakistan

View Show abstract

View Show abstract

Factors Affecting Dividend Payout in Pakistan's Textile Industry

FAKTOR INKONSISTENSI PERUSAHAAN DALAM PEMBAYARAN DIVIDEN

View Show abstract

Impact of Impression Management on Performance Rating

Determinants of Dividend Payout: Evidence from Financial Sector of Pakistan

Determinants of Capital Structure: An Evidence from Non-Financial Sector of Pakistan

Last Updated: 18 Dec 17

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