Analysis of Determinants of Dividend Policy in Vietnam and the US Markets

This study aims to investigate determinants that impact a company’s dividend policy in the Vietnam and US markets by researching public nonbank financial firms from 2017 to 2021 by applying panel data of 30 businesses listed on the Vietnam Stock Exchange and 30 businesses listed on the American Stock Exchange during the reporting period. Panel data is constructed with four independent variables in the Vietnam market, including liquidity, size, profitability, and leverage, and five independent variables in the US market, including investment opportunities, liquidity, size, profitability, leverage. The model investigates the association between a firm’s dividend policy and the independent variables. The dependent variable in the panel model is the dividend yield, whereas the independent variables are Tobin’s Q (in the American market), current ratio, ln (total asset), return on equity, and debt-to-equity ratio. Other tests, including diagnostic tests (multicollinearity, heteroskedasticity, and Durbin-Watson), are also conducted in the study. This paper not only analyzes the determinants affecting dividend policy but also explores the dividend policy of the different researched markets. The first result implies that dividend yield changes in Vietnam can be explained by liquidity, size, and profitability; so, collected firms in Vietnam tend to pay dividends regularly. The second result shows that dividend yield changes in the US can be clarified by investment opportunities and liquidity, so collected firms in the US tend to reinvest in long-term growth objectives.