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Dividend Payment and its Impact on the Value of Firms Listed on Istanbul Stock Exchange: A Residual Income Approach

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  • Akram Budagaga

    (Warsaw School of Economics (SGH), Poland.)

Abstract

The aim of this study is to examine the impact of dividend payments on the value of firms listed on the Istanbul Stock Exchange (ISE). The study has been adapted the residual income approach based on Ohlson's (1995) valuation model. By testing different statistical techniques, fixed effect is applied on panel data for 44 firms listed on ISE for the period 2007-2015, inclusive. The findings show a positive significant relationship between dividend payments and the value of firms. The results tend to support agency cost rather than the signaling hypothesis explanation. Moreover, the study suggests that the dividends irrelevance hypothesis is invalid in the case of firms listed on the (ISE).

Suggested Citation

  • Akram Budagaga, 2017. "Dividend Payment and its Impact on the Value of Firms Listed on Istanbul Stock Exchange: A Residual Income Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 7(2), pages 370-376.
    • Handle: RePEc:eco:journ1:2017-02-50
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    References listed on IDEAS

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    Cited by:

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    2. Rudi Zulfikar & Nana Nofianti & Kurniasih Dwi Astuti & Meutia Meutia & Aldi Ramadan, 2020. "The Role of Ownership’s Concentration Moderating Dividend Policy Effects on Firm Value," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 126-135.
    3. Rapanna, Patta, 2021. "Effect of Liability Asset Management and Company Growth on Company Value in Banking Industry Listed on Indonesia Stock Exchange," OSF Preprints 8265f, Center for Open Science.
    4. Vriska Mega PRATIWI & Anggita Langgeng WIJAYA & Ratih PARAMITASARI, 2022. "Dividend Policy and Firm Value in Indonesia: The Moderating Role of Capital Structure," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 3(3), pages 62-72, March.
    5. Hanan Amin Barakat, 2024. "The Impact of Initiating Dividend Payments on Shareholders’ Wealth: Evidence from Egypt," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 16(4), pages 1-58, April.
    6. Arista Andiani & Dwipraptono Agus Harjito, 2020. "Factors That Affect Firm Value Moderated by Profitability," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 7(7), pages 163-170, July.
    7. Hung Ngoc Dang & Van Thi Thuy Vu & Xuan Thanh Ngo & Ha Thi Viet Hoang, 2021. "Impact of dividend policy on corporate value: Experiment in Vietnam," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5815-5825, October.
    8. Chukwu Agwu Ejem & Udochukwu Godfrey Ogbonna, 2019. "Modelling Dividend Policy and Firms' Value Relations in Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 9(6), pages 171-176.

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    More about this item

    Keywords

    Dividend Payment; Residual Income; Value of Firms;
    All these keywords.

    JEL classification:

    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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