Dividend Behaviour and Smoothing: New Evidence from Jordanian Panel Data
Studies in Economics and Finance, Vol. 26, No. 3, pp. 182-197, 2009
Posted: 20 Oct 2008 Last revised: 2 Jan 2011
Date Written: April 1, 2008
Dividend policy is one of the important and puzzling issues in corporate finance it is a controversial subject that finance scholars engage in theorizing the tendency of firms for paying dividends or not. This paper investigates dividend policy decisions in developing countries through studying Jordanian non-financial firms. The paper finds that the dividend policy in Jordan as a developing country is influenced by factors similar to those relating to developed countries such as: leverage ratio, institutional ownership, profitability, business risk, asset structure, growth rate, and firm size. Furthermore, the factors affecting the likelihood of paying dividends are similar to those affecting the dividend policy. Finally, the results show that the Lintner model is valid for Jordanian data, and that Jordanian firms have target payout ratios and they adjust to their target relatively faster than those in developed countries.
Keywords: Dividend policy, dividend behaviour, Lintner model, panel data, tobit model, logit model
JEL Classification: G35, C23
Suggested Citation: Suggested Citation