Determinants of Payout Policy in Selected Countries in ASEAN (Thailand, Singapore, Malaysia and Indonesia)
Post by MSF Chula at Sunday, 10 January 2021 03:36 PM

Dividends are one of the return investors receive from firms and dividends are paid in different payout ratio depend on life-cycle stage the firms are. Firms with large amount of retained earnings are mature firms and would pay high dividends. My results show that across countries, earned/contributed capital mix which proxy by retained earnings divided by total equity has a positive impact on the amount of dividends and probability of dividend payment. Dividends are also used to convey some message to shareholders and investors about the stability of firm’s performance and cash-flow. So firms will not decrease the level of dividends and firms with low uncertainty of cash-flow would pay high dividends. My results also reveal that cash-flow uncertainty which proxy by volatility of stock return has a negative impact on the amount of dividends and probability of dividend payment. I find that earned/contributed capital mix is the most important determinant for Thailand, Singapore, Malaysia and Indonesia while cash-flow uncertainty is the important determinant among these countries except for Indonesia.

Last updated at Sunday, 10 January 2021 03:36 PM