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Factors Influencing Dividend Policy in Bangladesh: Survey Evidence from Listed Manufacturing Companies in Dhaka Stock Exchange

Author

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  • Mohammad Shahidul Islam

    (BGMEA University of Fashion & Technology, Dhaka, Bangladesh)

  • ATM Adnan

    (BGMEA University of Fashion & Technology, Dhaka, Bangladesh)

Abstract

A firm considers various factors when approaching a dividend policy decision. To analyze the determinants of dividend policy in the context of Bangladesh, questionnaire survey has been done from financial decision makers of sample companies. The nonparametric test and factor analysis is used for interpreting results. The research finding exhibits that in the first stage, the economic related factor, legal constraint factor, capital market related factor, residual policy factor, capital source factor and clientele factors are considered in dividend decision making. Then in the second stage, the companies follow the preceding years' pattern of dividend payment. In the next stage, dividend decision is made mainly on the level of earnings and liquidity. The observed result reveals that present earnings and liquidity are the most likely factors for the firm in deciding the payout policy.

Suggested Citation

  • Mohammad Shahidul Islam & ATM Adnan, 2018. "Factors Influencing Dividend Policy in Bangladesh: Survey Evidence from Listed Manufacturing Companies in Dhaka Stock Exchange," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 4(2), pages 156-173.
    • Handle: RePEc:men:journl:v:4:y:2018:i:2:p:156-173
    DOI: 10.11118/ejobsat.v4i2.132
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    References listed on IDEAS

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    Cited by:

    1. Akhmadi & Siti Epa Hardiyanti, 2020. "How to Attract Attention of Investors Through Dividend Policy on the Consumer Goods Industries?," International Journal of Business and Economic Affairs (IJBEA), Sana N. Maswadeh, vol. 5(1), pages 23-29.

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    More about this item

    Keywords

    factor analysis; EPS; DPR; MM model; Lintner model;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General
    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists

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