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Simultaneous Response of Dividend Policy and Value of Indonesia Manufacturing Companies An Approach of Vector Autoregression

Author

Listed:
  • Siahaan, Andysah Putera Utama

    (Universitas Pembangunan Panca Budi)

  • , Rusiadi
  • Nasution, Muhammad Dharma Tuah Putra
  • Aryza, Solly

Abstract

This paper examines the long-term simultaneous response between dividend policy and corporate value. The main problem studied is that the dividend policy is responded very slowly to the final goal of corporate value. Analysis of Data was using Vector Autoregression (VAR). The result of the discussion concludes the effect of different simultaneous response every period between dividend policy with corporate value, short-term, medium-term, and long-term. The strongest response to dividend changes comes from free cash flow whereas the highest response to corporate value comes from market book value.

Suggested Citation

  • Siahaan, Andysah Putera Utama & , Rusiadi & Nasution, Muhammad Dharma Tuah Putra & Aryza, Solly, 2018. "Simultaneous Response of Dividend Policy and Value of Indonesia Manufacturing Companies An Approach of Vector Autoregression," INA-Rxiv 6fydz, Center for Open Science.
    • Handle: RePEc:osf:inarxi:6fydz
    DOI: 10.31219/osf.io/6fydz
    as

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    References listed on IDEAS

    as
    1. Fama, Eugene F & MacBeth, James D, 1973. "Risk, Return, and Equilibrium: Empirical Tests," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 607-636, May-June.
    2. Kee‐Hong Bae & Seok Woo Jeong, 2007. "The Value‐relevance of Earnings and Book Value, Ownership Structure, and Business Group Affiliation: Evidence From Korean Business Groups," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 34(5‐6), pages 740-766, June.
    3. Kee-Hong Bae & Seok Woo Jeong, 2007. "The Value-relevance of Earnings and Book Value, Ownership Structure, and Business Group Affiliation: Evidence From Korean Business Groups," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 34(5-6), pages 740-766.
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