Dividend policy choice : do earnings or investment opportunities matter?

Ali Ahmed, Huson Joher and Shaikh, Junaid M. 2008, Dividend policy choice : do earnings or investment opportunities matter?, Afro-Asian journal of finance and accounting, vol. 1, no. 2, pp. 151-161.

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Title Dividend policy choice : do earnings or investment opportunities matter?
Author(s) Ali Ahmed, Huson Joher
Shaikh, Junaid M.
Journal name Afro-Asian journal of finance and accounting
Volume number 1
Issue number 2
Start page 151
End page 161
Total pages 11
Publisher Inderscience Publishers
Place of publication London, England
Publication date 2008
ISSN 1751-6447
1751-6455
Keyword(s) dividends
earnings
growth opportunities
logit model
equity market value
investment opportunities
dividend policy choices
Malaysia
Summary The aim of this paper is to analyse the influence of a company's level of earnings and growth opportunities in determining the dividend policy choice of Malaysian-listed firms. The analysis is based on a sample of 136 firms listed on the Bursa Malaysia Index over a period of six years, from 1990 to 1996. The evidence suggests that the payers are more profitable than non-payers. Likewise, investment opportunity, which is measured by (∂At /At-1) and (Vt /At), differed for both payers and non-payers. The regression estimates from Logit model suggest that the average coefficient for EATA is a significant determinant for firm's dividend policy choice in Malaysia. This is consistent with the supposition that profitable firms are more likely to pay dividends than less profitable firms. Although investment opportunities, the firm's size and leverage were not found to be statistically significant, they provided some explanation for the dividend policy choice.
Language eng
Field of Research 140207 Financial Economics
Socio Economic Objective 970114 Expanding Knowledge in Economics
HERDC Research category C1.1 Refereed article in a scholarly journal
Persistent URL http://hdl.handle.net/10536/DRO/DU:30023733

Document type: Journal Article
Collections: Faculty of Business and Law
School of Accounting, Economics and Finance
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Created: Tue, 16 Feb 2010, 16:04:41 EST by Huson Ali Ahmed

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