IDEAS home Printed from https://ideas.repec.org/a/asi/aeafrj/v14y2024i11p811-833id5227.html
   My bibliography  Save this article

Dividend payout and macroeconomy: Evidence from ASEAN country

Author

Listed:
  • Sharlene Natalia
  • Fairuz Thabit Radhitya
  • Moch Doddy Ariefianto
  • Angie Valentine

Abstract

This research examines the dividend payout and macroeconomy of ASEAN countries. Macroeconomic conditions significantly influence dividend payout policies, as they reflect business prospects and forecast a firm's future cash-earning capacity. These conditions help management decide whether to distribute cash earnings as dividends or retain them for growth or precautionary reasons. Macroeconomic factors are typically categorized into Short-Term Macroeconomic Factors (STMF) and Long-Term Macroeconomic Factors (LTMF). Despite the straightforward logic behind these classifications, scholarly consensus remains elusive. This paper contributes to the ongoing debate by examining the impact of macroeconomic factors on dividend policies, focusing on non-financial companies in the ASEAN region—a dynamic global area. We analyzed a sample of 2,193 ASEAN companies using annual data from 2011 to 2021, resulting in 24,123 observations. Employing the General Method of Moments (GMM) dynamic panel regression, the study finds that STMF negatively affects dividend payouts, while LTMF positively influences them. This distinction between short-term and long-term impacts has significant practical and regulatory implications. These findings hold up well when subjected to various robustness checks. Regulators need to maintain stable environment for firms by recognizing the importance of strong governance frameworks in fostering investor confidence, while investors need to be well-informed in response to uncertainty, as it can impact dividend and investment returns.

Suggested Citation

  • Sharlene Natalia & Fairuz Thabit Radhitya & Moch Doddy Ariefianto & Angie Valentine, 2024. "Dividend payout and macroeconomy: Evidence from ASEAN country," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 14(11), pages 811-833.
  • Handle: RePEc:asi:aeafrj:v:14:y:2024:i:11:p:811-833:id:5227
    as

    Download full text from publisher

    File URL: https://archive.aessweb.com/index.php/5002/article/view/5227/8100
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:asi:aeafrj:v:14:y:2024:i:11:p:811-833:id:5227. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Robert Allen (email available below). General contact details of provider: https://archive.aessweb.com/index.php/5002/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.