Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2019.1708769
Economic policy uncertainty and dividend sustainability: new insight from emerging equity market of China
Bushra Sarwar
Xiao Ming
Muhammad Husnain
Sažetak
We examine the influence of Economic Policy Uncertainty (E.P.U.)
on dividend sustainability – dividend termination and dividend
initiation decision. Using a sample of 1,375 firms over the time
span 2000–2015, our main result reveals that during high E.P.U.
past dividend payers are more likely to terminate and past nonpayers
are less likely to initiate dividends. However, firms that rely
more on internal finance (I.F.), generate high return on invested
capital (R.O.I.C.) and state-owned enterprises (S.O.E.s) are less
exposed to E.P.U. Therefore, negative (positive) effect of E.P.U. on
firms’ dividend initiation (termination) decision is mitigated by
considering firms’ heterogeneous characteristics. Results also
show that firms having high asset growth, maturity, profitability,
cash holdings and high firm value are more likely to initiate and
less likely to terminate dividend during period of high E.P.U. In
addition, effects of E.P.U. on dividend sustainability is higher for
firms functioning in high marketised areas relative to low marketised
groups. These findings are robust under different robustness
check. Finding confirms that transparent and stable implementation
of economic policies can improve sustainability of firm’s dividend
policy.
Ključne riječi
economic policy uncertainty (E.P.U.); dividend termination; dividend initiation; dividend sustainability; China
Hrčak ID:
254381
URI
Datum izdavanja:
9.2.2021.
Posjeta: 838 *