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The Effect of Dividend Payment on Firm’s Financial Performance: An Empirical Study of Vietnam

Author

Listed:
  • Anh Huu Nguyen

    (School of Accounting and Auditing, The National Economics University, Hanoi 113068, Vietnam)

  • Cuong Duc Pham

    (School of Accounting and Auditing, The National Economics University, Hanoi 113068, Vietnam)

  • Nga Thanh Doan

    (School of Accounting and Auditing, The National Economics University, Hanoi 113068, Vietnam)

  • Trang Thu Ta

    (School of Accounting and Auditing, The National Economics University, Hanoi 113068, Vietnam)

  • Hieu Thanh Nguyen

    (School of Accounting and Auditing, The National Economics University, Hanoi 113068, Vietnam)

  • Tu Van Truong

    (School of Accounting and Auditing, The National Economics University, Hanoi 113068, Vietnam)

Abstract

This research aims to investigate the effects of dividend policies on a firms’ financial performance. The paper explores the research gap and then builds a research model using ROA, ROE, and Tobin’s Q as dependent variables, dividend rate and decision of dividend payment as independent variables. The paper collected data and financial statements of 450 firms that are listing on the stock market of Vietnam from 2008 to 2019. The analysis results indicate that the decision of dividend payment has negative impact to Vietnamese firms measured by accounting-based performance but this improve market expectation on firms. In addition, the paper finds that Vietnamese firms are offering low dividend rate which has a positive impact on accounting-based performance but a negative effect on market expectation. This paper proposes some instructive recommendations based on the findings, including a more appropriate model of dividend policies, a lower dividend rate, and clear decision of dividend payment.

Suggested Citation

  • Anh Huu Nguyen & Cuong Duc Pham & Nga Thanh Doan & Trang Thu Ta & Hieu Thanh Nguyen & Tu Van Truong, 2021. "The Effect of Dividend Payment on Firm’s Financial Performance: An Empirical Study of Vietnam," JRFM, MDPI, vol. 14(8), pages 1-11, August.
    • Handle: RePEc:gam:jjrfmx:v:14:y:2021:i:8:p:353-:d:607897
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    References listed on IDEAS

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    Cited by:

    1. 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.

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