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Regulation Influence on the Dividend Policy of the Istanbul Stock Exchange (ISE) Corporations

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  • Cahit Adaoglu

Abstract

In this study, the regulation influence on the dividend policy of the ISE corporations is analyzed qualitatively and quantitatively. In 1995, there has been a significant change in the dividend regulations granting extensive flexibility in the dividend policy decision making for the corporations that are traded in the ISE. The empirical results show that for the period before the 1995 regulatory change, there are no industrial differences in the cash dividend policy due to the regulations that left little room for managers in determining their cash dividend policies. However, significant industrial differences in the cash dividend policy exist for the period after the 1995 regulatory change. Moreover, there is a substantial decrease in the median cash dividend payout ratios and ISE corporations tended to use the resources for internal financing. Additionally, ISE corporations collect back the distributed cash dividends through simultaneous rights issues for new equity. The repeated test results using net dividend payouts are similar to the results of cash dividend payouts.

Suggested Citation

  • Cahit Adaoglu, 1999. "Regulation Influence on the Dividend Policy of the Istanbul Stock Exchange (ISE) Corporations," Istanbul Stock Exchange Review, Research and Business Development Department, Borsa Istanbul, vol. 3(11), pages 1-20.
    • Handle: RePEc:bor:iserev:v:3:y:1999:i:11:p:1-20
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    File URL: http://www.borsaistanbul.com/datum/imkbdergi/EN/ISE_Review_11.pdf
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    Cited by:

    1. Kent Baker, H. & Kilincarslan, Erhan & Arsal, Alper Haktan, 2018. "Dividend policy in Turkey: Survey evidence from Borsa Istanbul firms," Global Finance Journal, Elsevier, vol. 35(C), pages 43-57.
    2. Cahit Adaoglu, 2008. "Dividend Policy of the ISE Industrial Corporations: The Evidence Revisited (1986-2007)," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 2(2), pages 113-135.

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