Preliminary communication
https://doi.org/10.18045/zbefri.2022.2.441
Factors influencing dividend payout policy: Evidence from listed non-financial firms of the Zagreb Stock Exchange
Darija Prša1
; Narodne novine d.d., Zagreb, Croatia
Aljoša Šestanović
Ivo Ramljak
Abstract
This paper aims to assess the impact of financial factors on the dividend payout
ratio, and the purpose is to research factors affecting dividend payout in less
developed markets and compare them with the results of previous studies. We use
the global research platform Screener.co, and the financial statements available on
Zagreb Stock Exchange to collect the data. Our sample consists of companies
listed on the Zagreb Stock Exchange that paid dividends at least once in the last
three years. In the model applied, we covered five years (dividends paid from 2017
to 2021, based on financial fundamentals preceding dividends from 2016 to 2020)
using hierarchical linear regression analysis that consists of four explanatory
variables: return on equity, return on assets, financial leverage, and free cash flow
to revenue. First, the research found high fluctuations in the dividend payout ratio
and return on equity variability. Secondly, we found no statistically significant
causality between the dividend payout ratio and explanatory variables. The results
suggest that other long-term non-financial factors, such as the investors’
expectations, history of paying dividends, and large cash reserves backed by high
retained earnings, may have a decisive impact on the dividend payout ratio rather
than recent financial factors.
Keywords
dividend policy; dividend payout; financial analysis; Zagreb Stock Exchange
Hrčak ID:
289645
URI
Publication date:
30.12.2022.
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