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Catering Theory of Dividend Policy in Polish Listed Companies

Author

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  • Justyna Bogolebska

Abstract

Purpose: The purpose of the article is to examine whether the catering theory is reflected in Polish listed companies in 2013-2020. Design/methodology/Approach: The study was conducted between 2013 and 2020. To verify the hypotheses, financial data was obtained from the Thompson Reuters database. The aim of the study was to verify whether the catering theory is applicable to Polish listed companies. Accordingly, it was assumed that decisions to pay dividends to shareholders are made in companies valued higher by the market (dividend-paying companies). The measure of valuation of the two groups of companies (group 1 - dividend-paying companies, group 2 - non-dividend-paying companies) was the MV / BV ratio according to the adopted Baker's methodology. The valuation of dividend-paying companies was set against non-dividend-paying companies. Findings: In view of the research conducted, it should be concluded that the catering theory is justified for the Polish listed company market. Practical Implications: The article examines the significance of the catering theory of dividend policy and investigates whether it can be discussed in the context of Polish listed companies. Originality/Value: The article undertakes a discussion in the area of dividend policy and one of the theories catering theory in dividend policy.

Suggested Citation

  • Justyna Bogolebska, 2023. "Catering Theory of Dividend Policy in Polish Listed Companies," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 197-208.
    • Handle: RePEc:ers:journl:v:xxvi:y:2023:i:2:p:197-208
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    References listed on IDEAS

    as
    1. Denis, David J. & Osobov, Igor, 2008. "Why do firms pay dividends? International evidence on the determinants of dividend policy," Journal of Financial Economics, Elsevier, vol. 89(1), pages 62-82, July.
    2. Ferris, Stephen P. & Jayaraman, Narayanan & Sabherwal, Sanjiv, 2009. "Catering effects in corporate dividend policy: The international evidence," Journal of Banking & Finance, Elsevier, vol. 33(9), pages 1730-1738, September.
    3. Gratiela Georgiana Noja & Eleftherios Thalassinos & Mirela Cristea & Irina Maria Grecu, 2021. "The Interplay between Board Characteristics, Financial Performance, and Risk Management Disclosure in the Financial Services Sector: New Empirical Evidence from Europe," JRFM, MDPI, vol. 14(2), pages 1-20, February.
    4. Malcolm Baker & Jeffrey Wurgler, 2004. "A Catering Theory of Dividends," Journal of Finance, American Finance Association, vol. 59(3), pages 1125-1165, June.
    5. von Eije, Henk & Megginson, William L., 2008. "Dividends and share repurchases in the European Union," Journal of Financial Economics, Elsevier, vol. 89(2), pages 347-374, August.
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    More about this item

    Keywords

    Catering theory; dividend policy; finance.;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

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