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Factors Affecting Dividend Policy on Non-Financial Companies in Indonesia

Author

Listed:
  • Novia Wijaya

    (Trisakti School of Management, Indonesia. Author-2-Name: Agathon Felix Author-2-Workplace-Name: Trisakti School of Management, Indonesia.)

Abstract

"Objective � The objective of this study is to obtain empirical evidence and analyse the factors that affect the dividend policy of non-financial firms listed on the Indonesian Stock Exchange. The factors studied include liquidity, leverage, growth, price/earnings, size, earnings per share, price to book ratio, ownership, age of the firm, floating rate, profitability, and free cash flow. Methodology/Technique � The sampling method used in this study is purposive sampling, in which the samples are taken based on suitable characteristics of the population to generate representative samples. The total number of samples in this study are 105 non-financial firms listed on the Indonesian Stock Exchange between 2011 and 2015. The hypothesis is tested by using multiple regression analysis. Findings � The results of this study show that earnings per share, price to book ratio, and floating rate affect the dividends policy while liquidity, leverage, growth, price/earnings, size, ownership, age of the firm, profitability, and free cash flow has no effect on dividend policy. Novelty � The study findings contribute the companies to establish an appropriate dividend policy to satisfy the interest of both parties that is companies future growth and its investors."

Suggested Citation

  • Novia Wijaya, 2017. "Factors Affecting Dividend Policy on Non-Financial Companies in Indonesia," GATR Journals afr139, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:afr139
    as

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    References listed on IDEAS

    as
    1. Shleifer, Andrei & Vishny, Robert W, 1986. "Large Shareholders and Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 461-488, June.
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    3. Rafael La Porta & Florencio Lopez‐de‐Silanes & Andrei Shleifer & Robert W. Vishny, 2000. "Agency Problems and Dividend Policies around the World," Journal of Finance, American Finance Association, vol. 55(1), pages 1-33, February.
    4. Gustavo Grullon & Roni Michaely & Bhaskaran Swaminathan, 2002. "Are Dividend Changes a Sign of Firm Maturity?," The Journal of Business, University of Chicago Press, vol. 75(3), pages 387-424, July.
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    More about this item

    Keywords

    Dividend Policy; Price to Book Ratio; Ownership; Age of the Firm; Floating Rate; Free Cash Flow.;
    All these keywords.

    JEL classification:

    • 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
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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