Dividend policy and changes on share price : A study on Vietnam stock market

Abstract

Dividend policy is one of the puzzles in corporate finance which has interested many researchers. In particular, the purpose of this study is to examine the relationship between share price changes and dividend policy of Vietnamese listed firms on Ho Chi Minh City Stock Exchange. Multiple regression analysis is used to explore the association between share price changes and dividend policy. The findings of this paper indicate that there is no evidence of significant relationship between stock price volatility and dividend policy. Including, an important implication of the study is that the reaction of share price to the dividend announcements in case of Vietnam - a developing country,

is not similar to other developed one. Therefore, the management may not abuse the dividend policy to affect the risk of their securities. Also, this paper contributes to reduce the shortage of studies on dividends and stock price volatility in emerging economies.