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Banks dividend policy: Evidence from Pakistan

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  • Imran, Kashif
  • Usman, Muhammad
  • Nishat, Muhammad

Abstract

The present study empirically investigates the factors that determine the dividend payout decisions among banks. For empirical analysis the data of sixteen banks listed in the Karachi Stock Exchange (KSE) are used. The results indicate that earning per share, last year's dividend payouts, capital ratio and size of the bank are crucial factors in the determination of dividend payouts, whereas cash flow is negatively associated with dividend payouts. The results support the Lintner model (1956) and also follow the transaction cost hypothesis.

Suggested Citation

  • Imran, Kashif & Usman, Muhammad & Nishat, Muhammad, 2013. "Banks dividend policy: Evidence from Pakistan," Economic Modelling, Elsevier, vol. 32(C), pages 88-90.
    • Handle: RePEc:eee:ecmode:v:32:y:2013:i:c:p:88-90
    DOI: 10.1016/j.econmod.2013.01.041
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    1. Ashraf, Badar Nadeem & Bibi, Bushra & Zheng, Changjun, 2016. "How to regulate bank dividends? Is capital regulation an answer?," Economic Modelling, Elsevier, vol. 57(C), pages 281-293.
    2. Mohammad Sami Ali, 2020. "Evaluating the Effectiveness of the Bird-in-Hand-Dividends Policy in the Stability of Jordanian Listed Banks," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(4), pages 96-110, July.
    3. Ahmad Fraz & Arshad Hassan, 2017. "Stock Price Synchronicity and Information Environment," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 9(4), pages 213-232, December.
    4. Al-Malkawi, Husam-Aldin Nizar & Ishaq Bhatti, M., 2020. "Are tests of dividend policy robust to estimation techniques: The case of an emerging economy?," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 541(C).
    5. Erhan Kilincarslan, 2018. "The Factors Determining the Dividend Policy of Financial Firms Listed on the Borsa Istanbul," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 32(1), pages 75-109.
    6. Marius Ayou Bene, 2023. "Foreign Ownership and Corporate Dividend Policy in Cameroon," Applied Economics and Finance, Redfame publishing, vol. 10(3), pages 41-56, August.
    7. Athari, Seyed Alireza & Adaoglu, Cahit & Bektas, Eralp, 2016. "Investor protection and dividend policy: The case of Islamic and conventional banks," Emerging Markets Review, Elsevier, vol. 27(C), pages 100-117.
    8. Bashir Zahid & Rafique Zulqurnain Zeeshan & Toor Kashif Naseer, 2022. "How do dynamic financing decisions explain the behavior of dividend payout policies?: An Empirical Study of Listed Pakistani Manufacturing Firms," Financial Internet Quarterly (formerly e-Finanse), Sciendo, vol. 18(1), pages 1-15, March.
    9. Seyed Alireza Athari, 2021. "The effects of institutional settings and risks on bank dividend policy in an emerging market: Evidence from Tobit model," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 4493-4515, July.
    10. Talla M Aldeehani, 2018. "Effects of the Global Financial Crisis on the Agency Cost of Islamic Banks and Conventional Banks," Applied Finance and Accounting, Redfame publishing, vol. 4(1), pages 41-53, February.
    11. Faheem ul Hussain Dehraj & Mukhtiar Ali Erri & Feroz Khan Laghari & Muhammad Fahad & Muhammad Ibrahim Tiwano, 2024. "How Does Capital Structure Influence the Dividend Policy? A Comparative study of both Commercial and Islamic Banks: A Time Series Analysis (2006-2021)," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(1), pages 391-397.

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