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The Determinants of Dividend Policy for Non-Financial Companies in Jordan

Author

Listed:
  • Bassam Jaara

    (Al Ahliyya Amman University, Jordan,)

  • Hikmat Alashhab

    (Coventry University, UK,)

  • Osama Omarali Jaara

    (American University of Madaba, Jordan,)

Abstract

This research investigates the determinant of dividend policy for a sample of Non-financial companies in Jordan over the period 2005-2016. This study concentrates on some variables that effect the dividend pay-out ratio and the dividend yield such as: Company size, risk, investment opportunities, historical dividend, profitability and leverage. This study used the panel dataset of non-financial companies in Jordan. The results show that company size showed significant positive impact, which could solve the free cash flow problem, mature and large companies were paying more and consistent dividends. The ROE was positive and significant, that firms with high profitability were paying larger consistent dividend pay-outs. The impact of historical dividends always positive and significant and signposts that firms trend of dividend payout rather than the random paying. Risk has a negative impact on the payout levels. The analysis was depending on some theories that affect the dividend policy such as: Dividends Irrelevance Theory, bird in hand theory, pecking order theory, Agency problems and signaling theory.

Suggested Citation

  • Bassam Jaara & Hikmat Alashhab & Osama Omarali Jaara, 2018. "The Determinants of Dividend Policy for Non-Financial Companies in Jordan," International Journal of Economics and Financial Issues, Econjournals, vol. 8(2), pages 198-209.
    • Handle: RePEc:eco:journ1:2018-02-24
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    Citations

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    Cited by:

    1. 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.
    2. Mubashir Ali Khan & Fareeha Abbasi & Muhammad Azeem Ahmad & Imran Arshad, 2020. "What Determines A Dividend Policy Of Listed Non-Financial Firms Of Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 16(2), pages 103-121.
    3. Suresh N & Pooja M, 2022. "A study on Determinants of Dividend Policy and its Impact on Financial Performances: A Panel Data Analysis for Indian Listed Firms," Papers 2207.00715, arXiv.org.

    More about this item

    Keywords

    Dividend Policy; Corporate Pay-out; Jordan;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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