Impacts of dividend policies on stock price volatility on HOSE
Abstract
The study examines whether dividend policy influences stock price in the Vietnamese stock market. The data of the study is taken from the State Bank of Vietnam and the Ho Chi Minh Stock Exchange in the period of 3 years from (2008 –
2010). The panel data consists of 110 companies listed on HOSE before studied period. In the study, descriptive statistics, correlation and regression are utilized to perform the data analysis based on the model of Baskin (1989) and Allen & Rachim (1996). There are many researchers conducted researches based on this model and the results are different in each countries.
The present study attempts to identify the relationship between Price Volatility and two independent variables: Dividend Yield, Dividend Payout Ratio and other control variables: Long Term Debt, Size, Earning Volatility, and Growth in Assets. Through thoroughly analysis, key findings of the study indicate there is no relationship between Dividend Policy and Stock Price Volatility. However, two among four control variables have significant relation with stock price volatility. In particular, Size has negative correlation while earning volatility has positive correlation to the changes of stock price.
Keywords: dividend policy, share price changes, dividend yield, dividend payout ratio.