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The Dividend Policy in Manufacturing Sector of Pakistan: The Perception of Corporate Managers

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  • Fazli Haleem
  • Attiya Y. Javid

Abstract

Using a survey approach, this paper examines the perceptions of managers of dividend-paying firms listed on Karachi Stock Exchange (KSE) on factors influencing dividend policy, issues relating dividend policy and the corporate governance practices. The survey shows that the most important factors that affect dividend policy are; the level of current earnings, the projection about the future state of the economy, the stockholders characteristics, concerns about the stock prices, need of current stockholders. From a practical perspective, there is little discrimination among the top ranked factors. All the surveyed firms formulate their dividend policies according the theoretical model of Lintner (1956). The survey also shows that there is no difference in responses about these factors with respect to various titles of the respondents such as chief financial officer or Chief Exceptive Officer. The survey also finds strong support for the life cycling theory followed by agency theory, signaling theory and the catering theory respectively. The survey also shows the presence of corporate governance practices in the surveyed firms.

Suggested Citation

  • Fazli Haleem & Attiya Y. Javid, 2011. "The Dividend Policy in Manufacturing Sector of Pakistan: The Perception of Corporate Managers," Journal of Economics and Behavioral Studies, AMH International, vol. 3(1), pages 63-75.
    • Handle: RePEc:rnd:arjebs:v:3:y:2011:i:1:p:63-75
    DOI: 10.22610/jebs.v3i1.256
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    References listed on IDEAS

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    Cited by:

    1. Mohammad Shahidul Islam & ATM Adnan, 2018. "Factors Influencing Dividend Policy in Bangladesh: Survey Evidence from Listed Manufacturing Companies in Dhaka Stock Exchange," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 4(2), pages 156-173.

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