Dividend behaviour and smoothing new evidence from Jordanian panel data
AbstractPurpose – The purpose of this paper is to investigate dividend policy decisions in developing countries through studying Jordanian non-financial firms. It aims to highlight the issue of dividend policy and the behaviour of dividends in Jordan as an emerging market. Design/methodology/approach – The paper examines the dividend policy situation in Jordan and compares the differences between developed markets and the emerging markets in the dividend policy context. It uses previous studies and it also covers the determinants of dividend policy. Findings – The paper finds that the dividend policy in Jordan, as a developing country, is influenced by factors similar to those relating to developed countries such as: leverage ratio, institutional ownership, profitability, business risk, asset structure, growth rate and firm size. Furthermore, the factors affecting the likelihood of paying dividends are similar to those affecting the dividend policy. Finally, the results show that the Lintner model is valid for Jordanian data, and that Jordanian firms have target payout ratios and that they adjust to their target relatively faster than firms in more developed countries. Practical implications – The practical implication of the study is that investors and managers should consider the factors that affect the dividend policy when they make their profit distribution decision. Originality/value – The paper investigates the factors that affect the dividend policy and also consider the behaviour issue of dividend payments.
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Bibliographic InfoArticle provided by Emerald Group Publishing in its journal Studies in Economics and Finance.
Volume (Year): 26 (2009)
Issue (Month): 3 (August)
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Find related papers by JEL classification:
- G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Basil Al-Najjar & Yacine Belghitar, 2012. "The information content of cashflows in the context of dividend smoothing," Economic Issues Journal Articles, Economic Issues, vol. 17(2), pages 57-70, September.
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