Dividend Policy Behaviour in the Jordanian Capital Market

Abstract

The numerous published theoretical and empirical papers have kept dividend policy in its prominent status in the corporate finance literature. Much of the empirical research has been applied on companies listed on advanced stock markets. Employing the panel data methodology, this paper examines the dividend policy behaviour of companies listed on the Jordanian capital market. Based on the time period 1985-1999, it is concluded that Jordanian companies follow stable cash dividend policies. Moreover, the results indicate that the 1996 imposition of a 10 percent tax rate on dividends did not lead to any significant changes in their dividend policies.

Keywords: Dividend policy; Stability; Jordanian capital market, Earnings per share, Lagged dividend per share

JEL Classification: F37, G35