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Impact of Dividend Taxation Changing on Dividend Policy of Romanian Companies Listed on Stock Market

Author

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  • Stela JAKOVA

    (Bucharest University of Economic Studies)

Abstract

The aim of this paper is to analyze factors (with an influence on value of transactions on stock exchange) which induce companies listed on Bucharest Stock Exchange to pay dividends for period 2008 – 2015. First we will estimate five regression models, taking into account some financial and macroeconomics variables. Second we will rebuild these five regression models including a dummy variable which indicates the change of dividend tax rate. Our analyses emphasized the fact that net income, liquidity index, BET return and total assets have a significant effect on dividend payment policy which keeps their significance also after introducing the dummy variable, except the BET rate which decreased its significance. Also only the change of dividend tax rate and net income have a positively significant impact over dividend payment policy of Romanian ‘companies. The findings from this study are useful to be taken in account by the board of managers of companies when they decide the dividend policy for the company. In the same time our study extends the existing literature on this topic, by analyzing the impact of the most recent change in dividend tax rate from 2015, and also by extending the factors which affect the dividend policy of the companies listed on stock exchange.

Suggested Citation

  • Stela JAKOVA, 2017. "Impact of Dividend Taxation Changing on Dividend Policy of Romanian Companies Listed on Stock Market," Romanian Statistical Review, Romanian Statistical Review, vol. 65(3), pages 81-92, September.
  • Handle: RePEc:rsr:journl:v:65:y:2017:i:3:p:81-92
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    References listed on IDEAS

    as
    1. Ahmed, Hafeez & Javid, Attiya Yasmin, 2008. "The determinants of dividend policy in Pakistan," MPRA Paper 37339, University Library of Munich, Germany.
    2. Oskar Kowalewski & Ivan Stetsyuk & Oleksandr Talavera, 2007. "Corporate Governance and Dividend Policy in Poland," Discussion Papers of DIW Berlin 702, DIW Berlin, German Institute for Economic Research.
    3. Dragota, Mihaela & Dragota, Victor & Tatu, Lucian & Tatu, Delia, 2009. "Income Taxation Regulation And Companies’ Behaviour: Is The Romanian Companies’ Dividend Policy Influenced By The Changes In Income Taxation?," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 6(1), pages 76-93, March.
    4. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    5. Andreas Charitou & Nikos Vafeas, 1998. "The Association Between Operating Cash Flows and Dividend Changes: An Empirical Investigation," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 25(1&2), pages 225-249.
    6. Jayant R. Kale & Thomas H. Noe, 1990. "Dividends, Uncertainty, And Underwriting Costs Under Asymmetric Information," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 13(4), pages 265-277, December.
    7. Husam-Aldin Nizar Al-Malkawi, 2007. "Determinants of Corporate Dividend Policy in Jordan: An Application of the Tobit Model," Journal of Economic and Administrative Sciences, Emerald Group Publishing, vol. 23(2), pages 44-70, December.
    8. Jayant R. Kale & Thomas H. Noe, 1990. "Dividends, Uncertainty, And Underwriting Costs Under Asymmetric Information," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 13(4), pages 265-277, December.
    9. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
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    More about this item

    Keywords

    dividend payout; dividend tax; stock market; stock exchange;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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