The impact of dividend policy on the stock price volatility in Vietnam Stock market
Abstract
The purpose of this study is to examine the relationship between dividend policy and share price volatility in the Vietnam Stock Market. Data in 4 years from 2008-2011 of 97 companies listed in Ho Chi Minh Securities Stock exchange and Ha Noi Stock Exchange was collected. Following the theoretical framework of Baskin (1989), we use a multiple regression analysis to explore the linkage between share price volatility and both dividend yield and dividend payout ratio. The primary equation was expanded by adding control variables including size, earning volatility, growth and leverage. Contrast to what we expected, the study fails to support Baskin (1989). We do not investigate any significance impacts of both dividend yield and dividend payout ratio on share price changes. Instead, Growth has most impact on share price volatility amongst predictor variables. This study shows that growth opportunities are the key driver of stock price changes in Vietnam.
Keywords: Dividend policy; Share price volatility; Dividend yield; Dividend payout ratio.