Capital Structure, Cost of Debt and Dividend Payout of Firms in New York and Shanghai Stock Exchanges

Jiang, J., and Jiranyakul, K., 'Capital Structure, Cost of Debt and Dividend Payout of Firms in New York and Shanghai Stock Exchanges,' International Journal of Economics and Financial Issues, Vol. 3, No. 1, pp. 113-121, 2013

9 Pages Posted: 5 Jan 2013 Last revised: 29 Mar 2014

See all articles by Komain Jiranyakul

Komain Jiranyakul

National Institute of Development Administration

Jun Jiang

Mahidol University International College (MUIC)

Date Written: January 4, 2013

Abstract

The Study collects panel data of listed firms in New York Stock and Shanghai Stock Exchanges during 1992 to 2008. The data are used to perform panel regression estimates for firms in each stock market. The main purpose is to compare the decision on dividend payout of listed firms in the two stock markets. The results from fixed effect estimates show that factors that can explain dividend payout of firms in New York Stock Exchange poorly explain dividend payout of firms in Shanghai Stock Exchange. This paper adds to the literature in that it provides an evidence of difference in dividend policy of firms between advanced and emerging stock markets. For policymakers in the Chinese economy, implementation of measures to enhance the advancement of bond market is necessary. Additionally, firms in Shanghai Stock Exchange should adjust their capital structure to provide room for investors to diversify and adjust their portfolios of stocks and bonds.

Keywords: Dividend payout, debt financing, equity financing, panel regression, stock markets

JEL Classification: G35, G30

Suggested Citation

Jiranyakul, Komain and Jiang, Jun, Capital Structure, Cost of Debt and Dividend Payout of Firms in New York and Shanghai Stock Exchanges (January 4, 2013). Jiang, J., and Jiranyakul, K., 'Capital Structure, Cost of Debt and Dividend Payout of Firms in New York and Shanghai Stock Exchanges,' International Journal of Economics and Financial Issues, Vol. 3, No. 1, pp. 113-121, 2013. Available at SSRN: https://ssrn.com/abstract=2196350

Komain Jiranyakul

National Institute of Development Administration ( email )

118 Seri Thai Road
Bangkok, 10240
Thailand

Jun Jiang (Contact Author)

Mahidol University International College (MUIC) ( email )

999 Buddhamonthon 4 Road
Salaya, Nakhonpathom, 73170
Thailand

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