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Effects of 2008 Financial Crisis on Dividend Payout Policies of Istanbul 100 Index Listed Companies

Author

Listed:
  • Tasci, Hazal

    (Akdeniz University)

  • Korkmaz, Turhan

    (Mersin University)

Abstract

In this study, both the factors affecting the dividend policy and the effect of the financial crises on the dividend policy of the companies were examined based on the 2008 Crisis. For this purpose, the analysis period is divided into three parts as whole period; 2004-2016, pre-crisis period; 2004-2008 and post-crisis period; 2009-2016 and the analysis has been performed by exercising panel data method as using financial data of 43 firms listed in ISE 100 Index. Consequently, a positive relation has been detected among dividend payout ratio being a dependent variable, firm profitability, growth opportunities, retain earning/equity ratio and cash ratio. Contrary to expectations, a positive relationship was found between growth opportunities and dividend payout ratio. On the other hand, it is identified that the factors influencing dividend policy of the firms change and cash ratio increase substantially at crisis periods. Due to the current liquidity problem, many companies have reduced dividend payout ratios in 2009-2010, but continue to pay. This proves that the information content and signaling effect of the dividend is valid even in times of crisis.

Suggested Citation

  • Tasci, Hazal & Korkmaz, Turhan, 2018. "Effects of 2008 Financial Crisis on Dividend Payout Policies of Istanbul 100 Index Listed Companies," Business and Economics Research Journal, Uludag University, Faculty of Economics and Administrative Sciences, vol. 9(3), pages 605-618, July.
    • Handle: RePEc:ris:buecrj:0347
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    More about this item

    Keywords

    Dividend Policy; Financial Crisis; BIST 100; Panel Data; Signaling Theory;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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