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

See all articles by Basil Al‐Najjar

Basil Al‐Najjar

University of London - School of Business, Economics and Informatics

Date Written: April 1, 2008

Abstract

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

Al-Najjar, Basil, Dividend Behaviour and Smoothing: New Evidence from Jordanian Panel Data (April 1, 2008). Studies in Economics and Finance, Vol. 26, No. 3, pp. 182-197, 2009 , Available at SSRN: https://ssrn.com/abstract=1285785

Basil Al-Najjar (Contact Author)

University of London - School of Business, Economics and Informatics ( email )

Malet Street
Bloomsbury
London, WC1E 7HX
United Kingdom

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