IDEAS home Printed from https://ideas.repec.org/a/rfb/journl/v10y2018i2p077-094.html
   My bibliography  Save this article

Dividend policy and socio-cultural factors: some preliminary findings

Author

Listed:
  • Hanaan Yaseen

Abstract

This study analyzes the impact of socio-cultural factors on dividend policy in 83 countries, for 12,150 companies in the period of 2009-2013. Using a hierarchical linear modelling it is noticed that there is a significant influence of socio-cultural factors on the dividend payout decision. Also, some financial factors, considered classics in literature, have been tested. Using a Logit-Normal Generalized Linear Mixed Effects Model it is proven that there is an association between socio-cultural factors and the probability to pay dividends. The main results confirm that religion, corruption, anti-self dealing index, law system, property rights and business freedom index have a significant impact on dividend policy.

Suggested Citation

  • Hanaan Yaseen, 2018. "Dividend policy and socio-cultural factors: some preliminary findings," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 10(2), pages 077-094, December.
    • Handle: RePEc:rfb:journl:v:10:y:2018:i:2:p:077-094
    as

    Download full text from publisher

    File URL: http://rfb.ase.ro/articole/Articol2_v10.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Liang Shao & Chuck CY Kwok & Omrane Guedhami, 2010. "National culture and dividend policy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(8), pages 1391-1414, October.
    2. Eugene F. Fama & Kenneth R. French, 2001. "Disappearing Dividends: Changing Firm Characteristics Or Lower Propensity To Pay?," Journal of Applied Corporate Finance, Morgan Stanley, vol. 14(1), pages 67-79, March.
    3. Hanaan Yaseen & Victor Dragotă, 2019. "Harmony, Hierarchy and Dividend Policy Around the World," Springer Proceedings in Business and Economics, in: David Procházka (ed.), Global Versus Local Perspectives on Finance and Accounting, pages 115-124, Springer.
    4. Fidrmuc, Jana P. & Jacob, Marcus, 2010. "Culture, agency costs, and dividends," Journal of Comparative Economics, Elsevier, vol. 38(3), pages 321-339, September.
    5. Cull, Robert & Xu, Lixin Colin, 2005. "Institutions, ownership, and finance: the determinants of profit reinvestment among Chinese firms," Journal of Financial Economics, Elsevier, vol. 77(1), pages 117-146, July.
    6. Luc Renneboog & Christophe Spaenjers, 2012. "Religion, economic attitudes, and household finance," Oxford Economic Papers, Oxford University Press, vol. 64(1), pages 103-127, January.
    7. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(1), pages 222-279, April.
    8. Dragota, Mihaela & Dragota, Victor & Tatu, Lucian & Tatu, Delia, 2009. "Income Taxation Regulation And Companies’ Behaviour: Is The Romanian Companies’ Dividend Policy Influenced By The Changes In Income Taxation?," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 6(1), pages 76-93, March.
    9. Rafael La Porta & Florencio Lopez‐de‐Silanes & Andrei Shleifer & Robert W. Vishny, 2000. "Agency Problems and Dividend Policies around the World," Journal of Finance, American Finance Association, vol. 55(1), pages 1-33, February.
    10. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
    11. Carlos Daniel Paulino & Paulo Soares & John Neuhaus, 2003. "Binomial Regression with Misclassification," Biometrics, The International Biometric Society, vol. 59(3), pages 670-675, September.
    12. Hilary, Gilles & Hui, Kai Wai, 2009. "Does religion matter in corporate decision making in America?," Journal of Financial Economics, Elsevier, vol. 93(3), pages 455-473, September.
    13. McNeil, Alexander J. & Wendin, Jonathan P., 2007. "Bayesian inference for generalized linear mixed models of portfolio credit risk," Journal of Empirical Finance, Elsevier, vol. 14(2), pages 131-149, March.
    14. Malcolm Baker & Jeffrey Wurgler, 2004. "A Catering Theory of Dividends," Journal of Finance, American Finance Association, vol. 59(3), pages 1125-1165, June.
    15. Djankov, Simeon & La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei, 2008. "The law and economics of self-dealing," Journal of Financial Economics, Elsevier, vol. 88(3), pages 430-465, June.
    16. Merton H. Miller & Franco Modigliani, 1961. "Dividend Policy, Growth, and the Valuation of Shares," The Journal of Business, University of Chicago Press, vol. 34, pages 411-411.
    17. Sung C. Bae & Kiyoung Chang & Eun Kang, 2012. "Culture, Corporate Governance, And Dividend Policy: International Evidence," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 35(2), pages 289-316, June.
    18. Miller, Merton H & Rock, Kevin, 1985. "Dividend Policy under Asymmetric Information," Journal of Finance, American Finance Association, vol. 40(4), pages 1031-1051, September.
    19. Stephan Bartke & Reimund Schwarze, 2008. "Risk-Averse by Nation or by Religion?: Some Insights on the Determinants of Individual Risk Attitudes," SOEPpapers on Multidisciplinary Panel Data Research 131, DIW Berlin, The German Socio-Economic Panel (SOEP).
    20. Ingrid-Mihaela Dragotă & Victor Dragotă & Andreea Curmei-Semenescu & Daniel Traian Pele, 2018. "Capital Structure and Religion. Some International Evidence," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 68(3), pages 415-442, September.
    21. Easterbrook, Frank H, 1984. "Two Agency-Cost Explanations of Dividends," American Economic Review, American Economic Association, vol. 74(4), pages 650-659, September.
    22. Victor Dragota & Anamaria Ciobanu & Delia Catarama & Andreea Semenescu & Carmen Maria Lacatus, 2009. "Minority Shareholders’ Protection: the Romanian Experience," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 2(02(531)), pages 35-48, February.
    23. Erdem Ucar, 2016. "Local Culture and Dividends," Financial Management, Financial Management Association International, vol. 45(1), pages 105-140, March.
    24. John, Kose & Williams, Joseph, 1985. "Dividends, Dilution, and Taxes: A Signalling Equilibrium," Journal of Finance, American Finance Association, vol. 40(4), pages 1053-1070, September.
    25. Hannu Tanninen, 1999. "Income inequality, government expenditures and growth," Applied Economics, Taylor & Francis Journals, vol. 31(9), pages 1109-1117.
    26. Tao Huang & Fei Wu & Jin Yu & Bohui Zhang, 2015. "Political risk and dividend policy: Evidence from international political crises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 46(5), pages 574-595, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:rfb:journl:v:10:y:2018:i:2:p:0077-094 is not listed on IDEAS
    2. Breuer, Wolfgang & Rieger, M. Oliver & Soypak, K. Can, 2014. "The behavioral foundations of corporate dividend policy a cross-country analysis," Journal of Banking & Finance, Elsevier, vol. 42(C), pages 247-265.
    3. Booth, Laurence & Zhou, Jun, 2017. "Dividend policy: A selective review of results from around the world," Global Finance Journal, Elsevier, vol. 34(C), pages 1-15.
    4. He, Wen & Zhang, Feida, 2022. "Languages and dividends," The British Accounting Review, Elsevier, vol. 54(6).
    5. Qin, Wei & Liang, Quanxi & Jiao, Yan & Lu, Meiting & Shan, Yaowen, 2022. "Social trust and dividend payouts: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 72(C).
    6. Eva Liljeblom & Sabur Mollah & Patrik Rotter, 2015. "Do dividends signal future earnings in the Nordic stock markets?," Review of Quantitative Finance and Accounting, Springer, vol. 44(3), pages 493-511, April.
    7. Javakhadze, David & Ferris, Stephen P. & Sen, Nilanjan, 2014. "An international analysis of dividend smoothing," Journal of Corporate Finance, Elsevier, vol. 29(C), pages 200-220.
    8. Mihir A. Desai & C. Fritz Foley & James R. Hines Jr., 2002. "Dividend Policy inside the Firm," NBER Working Papers 8698, National Bureau of Economic Research, Inc.
    9. Nicolas Aubert, 2016. "Does the Catering Theory of Dividend Apply to the French Listed Firms?," Bankers, Markets & Investors, ESKA Publishing, issue 145, pages 27-38, November-.
    10. Byrne, Julie & O’Connor, Thomas, 2017. "Creditor rights, culture and dividend payout policy," Journal of Multinational Financial Management, Elsevier, vol. 39(C), pages 60-77.
    11. Kamal Anouar & Nicolas Aubert, 2016. "Does the catering theory of dividend apply to the French listed firms?," Working Papers halshs-01401867, HAL.
    12. Matt Glendening & Inder K. Khurana & Wei Wang, 2016. "The market for corporate control and dividend policies: Cross-country evidence from M&A laws," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(9), pages 1106-1134, December.
    13. Basharat Khan & Qiujun Zhao & Amjad Iqbal & Irfan Ullah & Shahab Aziz, 2022. "Internal Dynamics of Dividend Policy in East-Asia: A Comparative Study of Japan and South Korea," SAGE Open, , vol. 12(2), pages 21582440221, April.
    14. Seyed Alireza Athari, 2021. "The effects of institutional settings and risks on bank dividend policy in an emerging market: Evidence from Tobit model," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 4493-4515, July.
    15. Ashraf, Badar Nadeem & Bibi, Bushra & Zheng, Changjun, 2016. "How to regulate bank dividends? Is capital regulation an answer?," Economic Modelling, Elsevier, vol. 57(C), pages 281-293.
    16. Hussein Abedi Shamsabadi & Byung-Seong Min & Richard Chung, 2016. "Corporate governance and dividend strategy: lessons from Australia," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 12(5), pages 583-610, October.
    17. Goyal, Abhinav & Jategaonkar, Shrikant P. & Muckley, Cal B., 2020. "Why do privatized firms pay higher dividends?," Journal of Corporate Finance, Elsevier, vol. 60(C).
    18. Darakhshan Younis & Attiya Yasmin Javid, 2014. "Market Imperfections and Dividend Policy Decisions of Manufacturing Sector of Pakistan," PIDE-Working Papers 2014:99, Pakistan Institute of Development Economics.
    19. Fidrmuc, Jana P. & Jacob, Marcus, 2010. "Culture, agency costs, and dividends," Journal of Comparative Economics, Elsevier, vol. 38(3), pages 321-339, September.
    20. Roni Michaely & Stefano Rossi & Michael Weber & Michael Weber, 2017. "The Information Content of Dividends: Safer Profits, Not Higher Profits," CESifo Working Paper Series 6751, CESifo.
    21. du Jardin, Philippe & Séverin, Eric, 2011. "Dividend policy," MPRA Paper 44382, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rfb:journl:v:10:y:2018:i:2:p:077-094. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tatu Lucian (email available below). General contact details of provider: https://edirc.repec.org/data/ffasero.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.