Determinants of Dividend Policy in Saudi Listed Companies

10 Pages Posted: 2 Feb 2017

Date Written: January 31, 2017

Abstract

This paper aims at investigating the factors affecting the dividend policy of companies listed in Saudi stock exchange, as applied on a sample of 67 companies over the period of from 2006 to 2014 using linear and logistic regression models.

Regarding the non-financial companies, using linear regression, results indicate that profitability, size, age and previous year’s dividend may have a significant positive effect on dividend payment ratio, while leverage and investment opportunities may have a significant negative effect. A robustness check using logistic regression supports the effect of profitability, size, age, and previous year’s dividend on the dividend decision.

Regarding the financial companies, using linear regression, results indicate that size, age, and previous year’s dividend may have a significant positive effect on dividend payment ratio, while leverage may have a significant negative effect. A robustness check using logistic regression supports the effect of size on the dividend decision.

Keywords: dividend policy, panel data analysis, Saudi listed companies

Suggested Citation

Alber, Nader and Alhabtour, Ahmad, Determinants of Dividend Policy in Saudi Listed Companies (January 31, 2017). Available at SSRN: https://ssrn.com/abstract=2909270 or http://dx.doi.org/10.2139/ssrn.2909270

Nader Alber (Contact Author)

Ain Shams University ( email )

Cairo
Egypt

Ahmad Alhabtour

Independent ( email )

No Address Available
United States

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