Dividend policy is still one of the most discussed issues in corporate finance. Many papers are d... more Dividend policy is still one of the most discussed issues in corporate finance. Many papers are determined to find which are the most relevant factors influencing dividend payments. The list of possible determining factors of dividend policy is very large, being difficult to integrate all of them in the decision-making process. In our paper, we propose an approach based on machine learning methods, using decision tree regression models. Using a database of 11,248 companies from 70 countries, for the period 2008–2014, we found the most relevant input factors which determine the level of the dividend payout ratio. On this shortlist of factors, both companies’ financial indicators (size, return on equity, beta, leverage, market-to-book ratio, foreign holdings) and sociocultural factors at the country level (legal origin, GDP/capita, pluralism index, social progress index, democracy index, Hofstede’s harmony hierarchy and egalitarianism indexes) are present. The best prediction models are similar for both developed and developing countries.
Dividend policy is still one of the most discussed issues in corporate finance. Many papers are d... more Dividend policy is still one of the most discussed issues in corporate finance. Many papers are determined to find which are the most relevant factors influencing dividend payments. The list of possible determining factors of dividend policy is very large, being difficult to integrate all of them in the decision-making process. In our paper, we propose an approach based on machine learning methods, using decision tree regression models. Using a database of 11,248 companies from 70 countries, for the period 2008–2014, we found the most relevant input factors which determine the level of the dividend payout ratio. On this shortlist of factors, both companies’ financial indicators (size, return on equity, beta, leverage, market-to-book ratio, foreign holdings) and sociocultural factors at the country level (legal origin, GDP/capita, pluralism index, social progress index, democracy index, Hofstede’s harmony hierarchy and egalitarianism indexes) are present. The best prediction models a...
Global Versus Local Perspectives on Finance and Accounting, 2019
Our study investigates the influence of national culture on corporate dividend policy by consider... more Our study investigates the influence of national culture on corporate dividend policy by considering Schwartz’s two cultural dimensions: harmony and hierarchy. The main motivation of the analysis is that people decisions are driven by their feelings and emotions, and these subjective factors can be as relevant as the objective companies’ factors when looking at dividend policy decisions. Using a database of 10,878 companies from 56 countries, for the period 2008–2014, we find that national harmony is positively related, and hierarchy negatively related to the dividend payout ratio. The local culture seems to be significantly associated with the dividend payout ratio.
This study analyzes the impact of socio-cultural factors on dividend policy in 83 countries, for ... more This study analyzes the impact of socio-cultural factors on dividend policy in 83 countries, for 12,150 companies in the period of 2009-2013. Using a hierarchical linear modelling it is noticed that there is a significant influence of socio-cultural factors on the dividend payout decision. Also, some financial factors, considered classics in literature, have been tested. Using a Logit-Normal Generalized Linear Mixed Effects Model it is proven that there is an association between socio-cultural factors and the probability to pay dividends. The main results confirm that religion, corruption, anti-self dealing index, law system, property rights and business freedom index have a significant impact on dividend policy.
Global Versus Local Perspectives on Finance and Accounting
The purpose of the study is to investigate if there is any association between the standards of l... more The purpose of the study is to investigate if there is any association between the standards of living within a country and the dividend payout ratio (DPR) of the companies activating in that country. Traditional corporate finance factors, analysed in the past literature in order to explain the dividend policy, can be insufficient when I try to explain decisions made within companies, which could be very much impacted by the feeling, emotions, needs and future plans of the shareholders. The decision regarding the dividend payments is made in the General Assembly of Shareholders. In this respect, I consider that there are also some other factors, in addition to the companies’ financial variables, which could influence this corporate decision. That is why I decided to examine if the population standards of living within a country may influence the dividend payout ratio. Using a large database, comprised of 10,878 companies from 56 countries, between 2008 and 2014, I find that quality of life influences significantly the decision to distribute higher share of net profits as dividends. Also, this study provides evidence that income inequality within a country influences positively the corporate decision to have higher dividend payout ratios.
This paper investigates whether national social progress influences dividend payout policy of com... more This paper investigates whether national social progress influences dividend payout policy of companies around the world. Using a large database of 12,312 companies from 70 countries, for 7 years (2008-2014), I provide strong evidence that social progress is significant in relation to important corporate decisions on paying dividends. Dividend payout policy is explained by the social progress of the country in which the company is active. Access to higher education, satisfaction of basic human needs, overall wellbeing and opportunities positively influence the dividend payout ratio and the propensity to pay dividends. Moreover, the Social Progress Index may be more significant than GDP per capita in relation to dividend policy. Hence, the new measure of quantifying the population's standard of living, from the social perspective and not from the economic one, is more relevant in the decision-making process on dividend payout.
Economics: The Open-Access, Open-Assessment E-Journal, 2019
Dividend policy is still a largely discussed issue in corporate finance literature. One of the ma... more Dividend policy is still a largely discussed issue in corporate finance literature. One of the main indicators used in analysing the dividend policy is the dividend payout ratio. Using a database consisting of 12,085 companies operating in 73 countries, for the period 2008-2014, the authors found that the dividend payout ratio follows a Tweedie distribution, and not a normal one. This distribution is stable over time for the entire analysed period. In addition, it describes the case of almost all the countries included in the sample. Thus, a better estimation of the probability that dividend payout ratio is lower or higher than a benchmark can be provided. Also, an analysis of dividend policy, distinctly considering payer versus non-payer companies, can offer additional important information for both practitioners and academics. JEL G35 C01 C51 C55
Dividend policy is still one of the most discussed issues in corporate finance. Many papers are d... more Dividend policy is still one of the most discussed issues in corporate finance. Many papers are determined to find which are the most relevant factors influencing dividend payments. The list of possible determining factors of dividend policy is very large, being difficult to integrate all of them in the decision-making process. In our paper, we propose an approach based on machine learning methods, using decision tree regression models. Using a database of 11,248 companies from 70 countries, for the period 2008–2014, we found the most relevant input factors which determine the level of the dividend payout ratio. On this shortlist of factors, both companies’ financial indicators (size, return on equity, beta, leverage, market-to-book ratio, foreign holdings) and sociocultural factors at the country level (legal origin, GDP/capita, pluralism index, social progress index, democracy index, Hofstede’s harmony hierarchy and egalitarianism indexes) are present. The best prediction models are similar for both developed and developing countries.
Dividend policy is still one of the most discussed issues in corporate finance. Many papers are d... more Dividend policy is still one of the most discussed issues in corporate finance. Many papers are determined to find which are the most relevant factors influencing dividend payments. The list of possible determining factors of dividend policy is very large, being difficult to integrate all of them in the decision-making process. In our paper, we propose an approach based on machine learning methods, using decision tree regression models. Using a database of 11,248 companies from 70 countries, for the period 2008–2014, we found the most relevant input factors which determine the level of the dividend payout ratio. On this shortlist of factors, both companies’ financial indicators (size, return on equity, beta, leverage, market-to-book ratio, foreign holdings) and sociocultural factors at the country level (legal origin, GDP/capita, pluralism index, social progress index, democracy index, Hofstede’s harmony hierarchy and egalitarianism indexes) are present. The best prediction models a...
Global Versus Local Perspectives on Finance and Accounting, 2019
Our study investigates the influence of national culture on corporate dividend policy by consider... more Our study investigates the influence of national culture on corporate dividend policy by considering Schwartz’s two cultural dimensions: harmony and hierarchy. The main motivation of the analysis is that people decisions are driven by their feelings and emotions, and these subjective factors can be as relevant as the objective companies’ factors when looking at dividend policy decisions. Using a database of 10,878 companies from 56 countries, for the period 2008–2014, we find that national harmony is positively related, and hierarchy negatively related to the dividend payout ratio. The local culture seems to be significantly associated with the dividend payout ratio.
This study analyzes the impact of socio-cultural factors on dividend policy in 83 countries, for ... more This study analyzes the impact of socio-cultural factors on dividend policy in 83 countries, for 12,150 companies in the period of 2009-2013. Using a hierarchical linear modelling it is noticed that there is a significant influence of socio-cultural factors on the dividend payout decision. Also, some financial factors, considered classics in literature, have been tested. Using a Logit-Normal Generalized Linear Mixed Effects Model it is proven that there is an association between socio-cultural factors and the probability to pay dividends. The main results confirm that religion, corruption, anti-self dealing index, law system, property rights and business freedom index have a significant impact on dividend policy.
Global Versus Local Perspectives on Finance and Accounting
The purpose of the study is to investigate if there is any association between the standards of l... more The purpose of the study is to investigate if there is any association between the standards of living within a country and the dividend payout ratio (DPR) of the companies activating in that country. Traditional corporate finance factors, analysed in the past literature in order to explain the dividend policy, can be insufficient when I try to explain decisions made within companies, which could be very much impacted by the feeling, emotions, needs and future plans of the shareholders. The decision regarding the dividend payments is made in the General Assembly of Shareholders. In this respect, I consider that there are also some other factors, in addition to the companies’ financial variables, which could influence this corporate decision. That is why I decided to examine if the population standards of living within a country may influence the dividend payout ratio. Using a large database, comprised of 10,878 companies from 56 countries, between 2008 and 2014, I find that quality of life influences significantly the decision to distribute higher share of net profits as dividends. Also, this study provides evidence that income inequality within a country influences positively the corporate decision to have higher dividend payout ratios.
This paper investigates whether national social progress influences dividend payout policy of com... more This paper investigates whether national social progress influences dividend payout policy of companies around the world. Using a large database of 12,312 companies from 70 countries, for 7 years (2008-2014), I provide strong evidence that social progress is significant in relation to important corporate decisions on paying dividends. Dividend payout policy is explained by the social progress of the country in which the company is active. Access to higher education, satisfaction of basic human needs, overall wellbeing and opportunities positively influence the dividend payout ratio and the propensity to pay dividends. Moreover, the Social Progress Index may be more significant than GDP per capita in relation to dividend policy. Hence, the new measure of quantifying the population's standard of living, from the social perspective and not from the economic one, is more relevant in the decision-making process on dividend payout.
Economics: The Open-Access, Open-Assessment E-Journal, 2019
Dividend policy is still a largely discussed issue in corporate finance literature. One of the ma... more Dividend policy is still a largely discussed issue in corporate finance literature. One of the main indicators used in analysing the dividend policy is the dividend payout ratio. Using a database consisting of 12,085 companies operating in 73 countries, for the period 2008-2014, the authors found that the dividend payout ratio follows a Tweedie distribution, and not a normal one. This distribution is stable over time for the entire analysed period. In addition, it describes the case of almost all the countries included in the sample. Thus, a better estimation of the probability that dividend payout ratio is lower or higher than a benchmark can be provided. Also, an analysis of dividend policy, distinctly considering payer versus non-payer companies, can offer additional important information for both practitioners and academics. JEL G35 C01 C51 C55
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