Do Firms in Emerging Markets Follow Different Dividend Policies From U.S. Firms?

Posted: 29 Jul 2003

See all articles by Varouj A. Aivazian

Varouj A. Aivazian

University of Toronto - Rotman School of Management

Laurence David Booth

University of Toronto - Rotman School of Management

W. Sean Cleary

Saint Mary's University, Canada - Department of Finance, Information Systems & Management Science; York University - Schulich School of Business

Abstract

We find that emerging market firms exhibit similar dividend behavior to U.S. firms in the sense that dividends are explained by profitability, debt, and the market to book ratio. However, empirical dividend policy equations are structurally different, indicating different sensitivities to these variables.

Additionally, emerging market firms seem to be more affected by asset mix, which seems to be due to their greater reliance on bank debt. Overall, country factors are as important in dividend policies as previous studies have found them to be in capital structure decisions.

JEL Classification: G35, G32

Suggested Citation

Aivazian, Varouj A. and Booth, Laurence David and Cleary, W. Sean, Do Firms in Emerging Markets Follow Different Dividend Policies From U.S. Firms?. Available at SSRN: https://ssrn.com/abstract=321984

Varouj A. Aivazian (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Department of Economics
Toronto, Ontario M5S 3E6
Canada
416-978-2375 (Phone)
416-978-5433 (Fax)

Laurence David Booth

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

W. Sean Cleary

Saint Mary's University, Canada - Department of Finance, Information Systems & Management Science ( email )

Halifax, Nova Scotia B3H 3C3
Canada

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada
416-736-2100 (Phone)
416-736-5687 (Fax)

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