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Are Dividends Disappearing or Shrinking? Evidence from the Istanbul Stock Exchange

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  • Berna Kirkulak
  • Guluzar Kurt

Abstract

This paper examines the dividend payment decision of publicly owned firms listed on the Istanbul Stock Exchange (ISE) from 1991 through 2006. There is a decline in the percentage of net dividend payers, accompanied by a decline in the aggregate level of net real dividends paid. Contrary to the situation in developed markets, earnings and dividends concentration have declined over the sample period. The first mandatory dividend payment regulation pushed some firms to collect the distributed dividends back through rights issues and this resulted in low net dividend payments. One of the striking findings of this paper reveals that a majority of ISE firms prefer dividend omissions rather than dividend reductions. Once a firm keeps paying dividends, it puts much effort into increasing dividend payments rather than reducing them. Further, dividend payment and reduction decisions are affected by the current earnings of the firm and financial crisis significantly explains both the dividend payment and dividend reduction decisions.

Suggested Citation

  • Berna Kirkulak & Guluzar Kurt, 2010. "Are Dividends Disappearing or Shrinking? Evidence from the Istanbul Stock Exchange," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 46(2), pages 38-52, March.
    • Handle: RePEc:mes:emfitr:v:46:y:2010:i:2:p:38-52
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    Citations

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    Cited by:

    1. Rihanat Idowu Abdulkadir & Nur Adiana Hiau Abdullah & Wong Woei-Chyuan, 2015. "Dividend Policy Changes in The Pre-, Mid-, and Post-Financial Crisis: Evidence from The Nigerian Stock Market," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 11(2), pages 103-126.
    2. Sara Faedfar & Mustafa Özyeşil & Mustafa Çıkrıkçı & Esin Benhür Aktürk, 2022. "Effective Risk Management and Sustainable Corporate Performance Integrating Innovation and Intellectual Capital: An Application on Istanbul Exchange Market," Sustainability, MDPI, vol. 14(18), pages 1-13, September.
    3. Zakayo S. Kisava & Fredynandy M. John, 2017. "Determinants of Dividends Payout and Policy Used In Emerging Economies: Evidence from Turkey," Business and Economic Research, Macrothink Institute, vol. 7(2), pages 362-374, December.
    4. Erhan Kilincarslan, 2018. "The Factors Determining the Dividend Policy of Financial Firms Listed on the Borsa Istanbul," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 32(1), pages 75-109.
    5. 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.
    6. Mar𨁂el鮠Lozano & Simone Caltabiano, 2015. "Cross institutional cash and dividend policies: focusing on Brazilian firms," Applied Economics, Taylor & Francis Journals, vol. 47(3), pages 239-254, January.

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