Determinants of dividend payout ratio: Evidence from listed companies on Ho Chi Minh stock market
Abstract
The main purpose of this paper research is to find out the association between
dividend policy and financial leverage, investment, risk, corporate tax, liquidity, size,
structure of asset, sale growth, cash flow, market-to-book value, ownership
concentration, sale size, and return on equity of listed companies on Ho Chi Minh City
Stock Exchange (HOSE). The sample consisted of 301 listed firms on HOSE in five
years range, from the year of 2008 and 2012. The study is carried out in form of
quantitative research approach with a deductive method. And we have based on some
previous dividend theories including: the dividend irrelevance theory, the bird in hand
theory, the signaling theory and the agency theory. So as to examine whether it exists the
relationship between the selected factors and the dividend payout ratio, the paper uses
both an Ordinary least square (OLS) and a linear regression. Multi-collinearity tests were
also analyzed so as to prove that no multi-collinearity affected the results of the study
research. The result indicates that some of the selected determinants have an impact on
the companies’ dividend payout ratios. Especially, return on equity is the strongest
positive impact on dividend payout ratio.
Keywords: Dividend policy, Financial leverage, Investment, Risk, Corporate tax,
Liquidity, Size, Structure of asset, Sale growth, Cash flow, Market-to-book value,
Ownership concentration, Sale size, and Return on equity.