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Managers’ Views on Dividend Policy of Nepalese Enterprises

Author

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  • Nabaraj Adhikari, Ph.D.

    (Securities Board of Nepal, Lalitpur)

Abstract

This paper analyses the perceptions of managers on dividend policy by surveying the views of 125 Managers of 66 companies listed at Nepal Stock Exchange. This survey is motivated by the observation that much of dividend policy theory is implicitly based on a capital market perspective. Out of 66 listed enterprises surveyed, 16 were from banks and 50 were from non-banks. To examine whether views of managers on dividend policy differ between banking group and non-banking group, chi-square analysis was used. Spearman’s rank correlation coefficient was calculated to find out the degree of relationship between the responses of banking group and non-banking group and it was tested for significance at 5 percent level of significance. Median value of responses for each statement of observation on dividend policy was computed to highlight the significance of observation. The results of this study indicate that the most important determinants of dividend policy in order are growth rate of enterprise’s earnings, patterns of past dividends, availability of investment opportunities; managers have more emphasis on the stable dividend policy; and dividend policy influences the value of the enterprise in Nepal. The findings of the study could be useful for research scholars, and users of financial information including corporate managers, investors, financial analysts, and regulators. The current study extends limited previous research based on questionnaire and survey related dividend policy. It thus provides new evidence from a pre-emerging capital market of Nepal.

Suggested Citation

  • Nabaraj Adhikari, Ph.D., 2014. "Managers’ Views on Dividend Policy of Nepalese Enterprises," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 26(1), pages 90-120, April.
    • Handle: RePEc:nrb:journl:v:26:y:2014:i:1:p:90
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Dividend Policy; Managers; Survey; Pay-out Ratio; Capital Market;
    All these keywords.

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • 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

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