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Dividend policy as a mediator between capital structure and profitability in manufacturing companies listed on ASE (2010-2021)

Author

Listed:
  • Khaled Aburisheh
  • Eyad Hyasat
  • Mohammad Salim Elessa
  • Mohammad Humeedat
  • Ahmad Kalbouneh
  • Hani Azab

Abstract

This study aimed to investigate the relationship between capital structure and profitability in manufacturing companies listed on the ASE, with a particular focus on the potential mediating effect of dividend policy. A survey approach was used to select a sample of 34 manufacturing companies, and panel data regression was used to analyse the financial data. Control variables were also incorporated into the analysis. The study found a significant correlation between profitability and ownership structure among Jordanian manufacturing companies. Furthermore, dividend policy was identified as a crucial factor influencing ownership structure and profitability, with a positive impact on profitability as measured by return on assets and return on equity. The study also highlighted the influence of business size and financial leverage as controlling variables affecting profitability. The findings suggest that companies should consider dividend policy when deciding on their capital structure to improve profitability.

Suggested Citation

  • Khaled Aburisheh & Eyad Hyasat & Mohammad Salim Elessa & Mohammad Humeedat & Ahmad Kalbouneh & Hani Azab, 2023. "Dividend policy as a mediator between capital structure and profitability in manufacturing companies listed on ASE (2010-2021)," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 26(3), pages 403-425.
    • Handle: RePEc:ids:ijecbr:v:26:y:2023:i:3:p:403-425
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