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What Determines the Dividend Payout Ratio for Jordanian Industrial Firms?

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  • Philip A. Hamill

    (Philip A. Hamill, Department of Accounting, Finance and Economics, Ulster Business School, University of Ulster, Shore Road, Newtownabbey, Co. Antrim, Northern Ireland, BT37 0QB, UK. E-mail: pa.hamill@ulster.ac.uk)

  • Wasim Al-Shattarat

    (Wasim Al-Shattarat, College of Business Administration, Gulf University for Science and Technology, P.O. Box 7207, Hawally 32093, Kuwait. E-mail: Shattarat.W@gust.edu.kw)

Abstract

There is a plethora of empirical evidence testing theories which have been proposed to explain dividend policies and assessments of managerial opinions for firms listed on developed markets’ stock exchanges. In contrast, the evidence for emerging markets is limited. We investigate the determinants of the dividend payout ratio (DPR) for a sample of Jordanian listed firms. Consistent with the agency cost hypothesis, the level of inside ownership, the number of shareholders and the level of institutional ownership significantly influenced the DPR. Firm size was also significant supporting the transaction-cost hypothesis. Our empirical analysis failed to find any evidence to support the signalling hypothesis. JEL Classification : G32, G35, G38

Suggested Citation

  • Philip A. Hamill & Wasim Al-Shattarat, 2012. "What Determines the Dividend Payout Ratio for Jordanian Industrial Firms?," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 11(2), pages 161-188, August.
    • Handle: RePEc:sae:emffin:v:11:y:2012:i:2:p:161-188
    DOI: 10.1177/0972652712454515
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    References listed on IDEAS

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    More about this item

    Keywords

    Dividend policy; dividend payout ratio; Jordan;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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