IDEAS home Printed from https://ideas.repec.org/a/sae/sagope/v7y2017i1p2158244016682291.html
   My bibliography  Save this article

A Sectoral Analysis of Dividend Payment Behavior

Author

Listed:
  • Muhammad Nadeem Khan
  • Moona Shamim

Abstract

This study analyzes the sector-wise dividend payment behavior of Karachi Stock Exchange (KSE) for the period 2009 through 2013. First, the trend of dividend payment of 5 years with respect to all 32 sectors is assessed through descriptive analysis. Second, the unit root test for panel data and pooled ordinary lest square (POLS) test were used on 15 non-financial sectors. Results show that the earning per share has a positive impact on dividend payment in eight sectors including beverages, travel and leisure, fixed-line telecommunication, food processors, household goods, personal goods, automobiles, and electricity; however, forestry (paper and board) is negatively associated with the dividend payout ratio. In addition, free cash flow has a positive impact on dividend payment in fixed-line telecommunication, and a negative impact on chemical, forestry, construction and material, engineering, beverages, tobacco, travel and leisure, food processor, household goods, pharmaceutical and biotech, and automobiles.

Suggested Citation

  • Muhammad Nadeem Khan & Moona Shamim, 2017. "A Sectoral Analysis of Dividend Payment Behavior," SAGE Open, , vol. 7(1), pages 21582440166, January.
    • Handle: RePEc:sae:sagope:v:7:y:2017:i:1:p:2158244016682291
    DOI: 10.1177/2158244016682291
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/2158244016682291
    Download Restriction: no
    File URL: https://libkey.io/10.1177/2158244016682291?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Quoc Trung Tran & Thi Thu Ha Nguyen, 2014. "Dividend Policy Behavior in Emerging Stock Markets: Evidence from Vietnamese Stock Market," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 5(4), pages 85-89, October.
    2. Eugene F. Fama & Kenneth R. French, 2001. "Disappearing Dividends: Changing Firm Characteristics Or Lower Propensity To Pay?," Journal of Applied Corporate Finance, Morgan Stanley, vol. 14(1), pages 67-79, March.
    3. Francisca Bremberger & Carlo Cambini & Klaus Gugler & Laura Rondi, 2016. "Dividend Policy In Regulated Network Industries: Evidence From The Eu," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 408-432, January.
    4. Bradford, David F., 1981. "The incidence and allocation effects of a tax on corporate distributions," Journal of Public Economics, Elsevier, vol. 15(1), pages 1-22, February.
    5. Rihanat Idowu Abdulkadir & Nur Adiana Hiau Abdullah & Woei-Chyuan Wong, 2016. "Dividend Payment Behaviour and its Determinants: The Nigerian Evidence," African Development Review, African Development Bank, vol. 28(1), pages 53-63, March.
    6. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    7. Hines, James R, Jr, 1996. "Dividends and Profits: Some Unsubtle Foreign Influences," Journal of Finance, American Finance Association, vol. 51(2), pages 661-689, June.
    8. Azhagaiah Ramachandran & Veeramuthu Packkirisamy, 2010. "The Impact of Firm Size on Dividend Behaviour: A Study With Reference to Corporate Firms across Industries in India," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 8(1), pages 049-078.
    9. Matthias Nnadi & Nyema Wogboroma & Bariyima Kabel, 2013. "Determinants of Dividend Policy: Evidence from Listed Firms in the African Stock Exchanges," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 60(6), pages 725-741, December.
    10. Pandey I M, 2001. "Corporate Dividend Policy and Behaviour: The Malaysian Evidence," IIMA Working Papers WP2001-11-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    11. H. Kent Baker & Samir Saadi & Shantanu Dutta & Devinder Gandhi, 2007. "The perception of dividends by Canadian managers: new survey evidence," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 3(1), pages 70-91, January.
    12. Stephen P. Ferris & Nilanjan Sen & Emre Unlu, 2009. "An International Analysis of Dividend Payment Behavior," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 36(3-4), pages 496-522.
    13. Javakhadze, David & Ferris, Stephen P. & Sen, Nilanjan, 2014. "An international analysis of dividend smoothing," Journal of Corporate Finance, Elsevier, vol. 29(C), pages 200-220.
    14. Joshua Abor & Godfred A. Bokpin, 2010. "Investment opportunities, corporate finance, and dividend payout policy," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 27(3), pages 180-194, August.
    15. repec:bla:jfinan:v:59:y:2004:i:3:p:1125-1165 is not listed on IDEAS
    16. Stephen P. Ferris & Nilanjan Sen & Emre Unlu, 2009. "An International Analysis of Dividend Payment Behavior," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 36(3‐4), pages 496-522, April.
    17. Merton H. Miller & Franco Modigliani, 1961. "Dividend Policy, Growth, and the Valuation of Shares," The Journal of Business, University of Chicago Press, vol. 34, pages 411-411.
    18. Jasim Al-Ajmi & Hameeda Abo Hussain, 2011. "Corporate dividends decisions: evidence from Saudi Arabia," Journal of Risk Finance, Emerald Group Publishing, vol. 12(1), pages 41-56, January.
    19. Shefrin, Hersh M. & Statman, Meir, 1984. "Explaining investor preference for cash dividends," Journal of Financial Economics, Elsevier, vol. 13(2), pages 253-282, June.
    20. Duscha, Vicki & Fougeyrollas, Arnaud & Nathani, Carsten & Pfaff, Matthias & Ragwitz, Mario & Resch, Gustav & Schade, Wolfgang & Breitschopf, Barbara & Walz, Rainer, 2016. "Renewable energy deployment in Europe up to 2030 and the aim of a triple dividend," Energy Policy, Elsevier, vol. 95(C), pages 314-323.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Nasir Ali & Muhammad Zia Ur Rehman & Badar Nadeem Ashraf & Falik Shear, 2022. "Corporate Dividend Policies during the COVID-19 Pandemic," Economies, MDPI, vol. 10(11), pages 1-12, October.
    2. Mubashir Ali Khan & Fareeha Abbasi & Muhammad Azeem Ahmad & Imran Arshad, 2020. "What Determines A Dividend Policy Of Listed Non-Financial Firms Of Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 16(2), pages 103-121.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Faruk Bostanci & Eyup Kadioglu & Guven Sayilgan, 2018. "Determinants of Dividend Payout Decisions: A Dynamic Panel Data Analysis of Turkish Stock Market," IJFS, MDPI, vol. 6(4), pages 1-16, November.
    2. Fernau, Erik & Hirsch, Stefan, 2019. "What drives dividend smoothing? A meta regression analysis of the Lintner model," International Review of Financial Analysis, Elsevier, vol. 61(C), pages 255-273.
    3. Fakhrul Hasan & Umar Nawaz Kayani & Tonmoy Choudhury, 2023. "Behavioral Risk Preferences and Dividend Changes: Exploring the Linkages with Prospect Theory Through Empirical Analysis," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 24(4), pages 517-535, December.
    4. Urszula Mrzyglod & Sabina Nowak & Magdalena Mosionek-Schweda & Jakub M. Kwiatkowski, 2021. "What drives the dividend decisions in BRICS countries?," Oeconomia Copernicana, Institute of Economic Research, vol. 12(3), pages 593-629, September.
    5. Annette Alstadsæter & Erik Fjærli, 2009. "Neutral taxation of shareholder income? Corporate responses to an announced dividend tax," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(4), pages 571-604, August.
    6. Joseph Yensu & Charles Adusei, 2016. "Dividend Policy Decision across African Countries," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(6), pages 1-63, June.
    7. Chris Mitchell, 2019. "The Lock-In Effect and the Corporate Payout Puzzle," ISER Discussion Paper 1070r, Institute of Social and Economic Research, Osaka University, revised Aug 2021.
    8. Rój Justyna, 2019. "The Determinants of Corporate Dividend Policy in Poland," Ekonomika (Economics), Sciendo, vol. 98(1), pages 96-110, June.
    9. Geetanjali Pinto & Shailesh Rastogi, 2019. "Sectoral Analysis of Factors Influencing Dividend Policy: Case of an Emerging Financial Market," JRFM, MDPI, vol. 12(3), pages 1-18, June.
    10. Stuart Archbold & Elisabete F. Simões Vieira, 2010. "Corporate Dividend Policies in Bank-based and Market-based Systems: Survey Evidence from UK and Portugal," Portuguese Journal of Management Studies, ISEG, Universidade de Lisboa, vol. 0(1), pages 34-64.
    11. Chris Mitchell, 2019. "The Lock-In Effect and the Corporate Payout Puzzle," ISER Discussion Paper 1070, Institute of Social and Economic Research, Osaka University.
    12. du Jardin, Philippe & Séverin, Eric, 2011. "Dividend policy," MPRA Paper 44382, University Library of Munich, Germany.
    13. Brav, Alon & Graham, John R. & Harvey, Campbell R. & Michaely, Roni, 2005. "Payout policy in the 21st century," Journal of Financial Economics, Elsevier, vol. 77(3), pages 483-527, September.
    14. Schmid, Thomas & Ampenberger, Markus & Kaserer, Christoph & Achleitner, Ann-Kristin, 2010. "Controlling shareholders and payout policy: do founding families have a special 'taste for dividends'?," CEFS Working Paper Series 2010-01, Technische Universität München (TUM), Center for Entrepreneurial and Financial Studies (CEFS).
    15. Danilo Stojanovic, 2022. "The 2003 Tax Reform and Corporate Payout Policy in the US," CERGE-EI Working Papers wp727, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    16. Maria Elisabete Duante Neves, 2017. "Payout and Firm's Catering," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 104-132.
    17. Kent Daniel & Lorenzo Garlappi & Kairong Xiao, 2021. "Monetary Policy and Reaching for Income," Journal of Finance, American Finance Association, vol. 76(3), pages 1145-1193, June.
    18. Mihir A. Desai & C. Fritz Foley & James R. Hines Jr., 2002. "Dividend Policy inside the Firm," NBER Working Papers 8698, National Bureau of Economic Research, Inc.
    19. Jasminder Kaur, 2019. "Firm’s Life Cycle Spurs the Dividend Payments: A Fallacy or an Actuality?," Paradigm, , vol. 23(1), pages 36-52, June.
    20. repec:ers:journl:v:v:y:2017:i:4:p:104-132 is not listed on IDEAS
    21. Brawn, Derek A. & Šević, Aleksandar, 2018. "“Firm size matters: Industry sector, firm age and volatility do too in determining which publicly-listed US firms pay a dividend”," International Review of Financial Analysis, Elsevier, vol. 58(C), pages 132-152.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:sagope:v:7:y:2017:i:1:p:2158244016682291. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.