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Moderating Role of Financial Market Development on the Relationship between Stock Liquidity and Dividend

Author

Listed:
  • Mohd Ashari Bakri

    (Labuan Faculty of International Finance, Universiti Malaysia Sabah, Labuan International Campus, Jalan Sungai Pagar, 87000 Federal Territory of Labuan, Malaysia)

  • Bany-Ariffin Amin Nordin

    (Department of Accounting and Finance, Universiti Putra Malaysia, 43400 Serdang, Selangor, Malaysia)

  • Bolaji Tunde Matemilola

    (Department of Accounting and Finance, Universiti Putra Malaysia, 43400 Serdang, Selangor, Malaysia)

  • Lau Wei Theng

    (Department of Accounting and Finance, Universiti Putra Malaysia, 43400 Serdang, Selangor, Malaysia)

Abstract

This article aims to investigate the relationship between stock liquidity and dividend across emerging market countries as well as examined the moderating role of financial market development on the relationship between stock liquidity and dividend. Data were obtained from the World Bank and DataStream databases. The study examined 3,258 listed firms from 22 emerging markets to be extrapolated in the emerging market context. To analyse the data, this article used the panel data Tobit model and panel logistic regression, both with random effects. The analysis revealed that financial market development has a positive moderating effect on the relationship between stock liquidity and dividend by improving local market liquidity and mitigating information asymmetry. The study findings provide information for managers to devise investment strategy in the emerging markets. This article provides new insights into the financial market development moderating role on the relationship between stock liquidity and dividend.

Suggested Citation

  • Mohd Ashari Bakri & Bany-Ariffin Amin Nordin & Bolaji Tunde Matemilola & Lau Wei Theng, 2020. "Moderating Role of Financial Market Development on the Relationship between Stock Liquidity and Dividend," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 16(2), pages 77-99.
    • Handle: RePEc:usm:journl:aamjaf01602_77-99
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    References listed on IDEAS

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    Cited by:

    1. Stereńczak, Szymon & Kubiak, Jarosław, 2022. "Dividend policy and stock liquidity: Lessons from Central and Eastern Europe," Research in International Business and Finance, Elsevier, vol. 62(C).
    2. Stereńczak Szymon & Kubiak Jarosław, 2023. "The choice of external financing source: The role of company size and stock liquidity," Economics and Business Review, Sciendo, vol. 9(3), pages 44-65, October.

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