IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Dividend Policy and Price Volatility. Empirical Evidence from Jordan

Listed author(s):
  • Imad Zeyad Ramadan


    (Applied Science University)

Registered author(s):

    The aim of this paper is to investigate the influence of the dividend policy on the share price volatility for the Jordanian industrial firms. All the 77 Jordanian industrial firms listed at Amman Stock Exchange for twelve years from 2000 to 2011 have been selected. Descriptive analysis, correlation analysis and a cross-sectional time series multiple least square regression method have been used to present data analysis, test hypotheses, and achieve the objective of the study. The experiential results showed significant negative effect of the two components of the dividend policy D_Y and D_P, on the share price volatility, indicating that as the Jordanian industrial firms increase their dividend yield and/or dividend payout, the stock prices tend to stability, as the price volatility fall, and thus, the share price risks fall. Moreover, the results conclude that the dividend policy has an impact on the price volatility, and that the managers of the Jordanian industrial firms have the ability to affect their firm's share price by adapting dividend policy that suits their target investors. Moreover, the study suggests that duration effect theory and signaling theory are relevant in determining the share price volatility in the Jordanian equity market.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no

    Article provided by Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences in its journal International Journal of Academic Research in Accounting, Finance and Management Sciences.

    Volume (Year): 3 (2013)
    Issue (Month): 2 (April)
    Pages: 15-22

    in new window

    Handle: RePEc:hur:ijaraf:v:3:y:2013:i:2:p:15-22
    Contact details of provider: Web page:

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    in new window

    1. Pettit, R Richardson, 1972. "Dividend Announcements, Security Performance, and Capital Market Efficiency," Journal of Finance, American Finance Association, vol. 27(5), pages 993-1007, December.
    2. Myron J. Gordon & Eli Shapiro, 1956. "Capital Equipment Analysis: The Required Rate of Profit," Management Science, INFORMS, vol. 3(1), pages 102-110, October.
    3. Merton H. Miller & Franco Modigliani, 1961. "Dividend Policy, Growth, and the Valuation of Shares," The Journal of Business, University of Chicago Press, vol. 34, pages 411-411.
    4. Parkinson, Michael, 1980. "The Extreme Value Method for Estimating the Variance of the Rate of Return," The Journal of Business, University of Chicago Press, vol. 53(1), pages 61-65, January.
    5. Muhammad Asghar & Syed Zulfiqar Ali Shah & Kashif Hamid & Muhammad Tahir Suleman, 2011. "Impact of Dividend Policy on Stock Price Risk: Empirical Evidence from Equity Market of Pakistan," Far East Journal of Psychology and Business, Far East Research Centre, vol. 4(4), pages 45-52, July.
    6. Khaled Hussainey, 2011. "Dividend policy and share price volatility: UK evidence," Journal of Risk Finance, Emerald Group Publishing, vol. 12(1), pages 57-68, January.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:hur:ijaraf:v:3:y:2013:i:2:p:15-22. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hassan Danial Aslam)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.