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What do we know about the dividend puzzle? – A literature survey

Author

Listed:
  • Basil Al-Najjar
  • Erhan Kilincarslan

Abstract

Purpose - The purpose of this paper is to shed light on the ongoing debate of dividend policy, which is considered one of the most controversial topics in corporate finance literature. Design/methodology/approach - The paper provides a survey of literature; it, first, outlines the main theoretical arguments of dividend policy and then critically discusses the most important and influential previous empirical studies in the dividend literature. Findings - The analysis of literature review detects that no general consensus has yet been reached after many decades of investigation, despite extensive debate and countless research. Consequently, the main motivation for paying dividends is still unsolved and thus remains as a puzzle. In addition, there is no doubt that carrying the dividend debate into the context of emerging markets attaches more pieces to this puzzle. Originality/value - This paper offers an updated and more comprehensive survey of literature by examining the relationship between theory and practice from both developed and emerging markets.

Suggested Citation

  • Basil Al-Najjar & Erhan Kilincarslan, 2019. "What do we know about the dividend puzzle? – A literature survey," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 15(2), pages 205-235, March.
    • Handle: RePEc:eme:ijmfpp:ijmf-03-2018-0090
    DOI: 10.1108/IJMF-03-2018-0090
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    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. Carlos P. Maquieira & Christian Espinosa‐Méndez & José T. Arias, 2024. "The impact of environmental, social and governance (ESG) score on dividend payment of large family firms: What is the role of financial constraints? International evidence," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 2311-2332, May.
    2. Codruț-Florin Ivașcu, 2024. "Understanding Dividend Puzzle Using Machine Learning," Computational Economics, Springer;Society for Computational Economics, vol. 64(1), pages 161-179, July.
    3. Merchan Alvarez, Federico Alberto, 2023. "Export impact on dividend policy for big Colombian exporting firms, 2006-2014," Kiel Working Papers 2243, Kiel Institute for the World Economy (IfW Kiel).
    4. Naina Narang & Seema Gupta & Naliniprava Tripathy, 2023. "A bibliometric analysis of governance mechanisms in dividend decisions: an overview and emerging trends," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 20(4), pages 410-430, December.
    5. Benjamin Amoah, 2024. "The story of dividend payment and corporate cash flow in Ghana," African Development Review, African Development Bank, vol. 36(1), pages 30-40, March.
    6. Tobias Basse & Christoph Schwarzbach & J.-Matthias Schulenburg, 2023. "Dividend policy issues in the European pharmaceutical industry: new empirical evidence," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 24(5), pages 803-816, July.

    More about this item

    Keywords

    Agency costs; Signalling theory; Dividend policy; Tax preference; G35;
    All these keywords.

    JEL classification:

    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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