Internal and external factors of dividend payout policy: Evidence from Malaysian Construction Sector / Muhammad Hafiz Ali, Norhuda Abdul Rahim and Mohamed Hisham Yahya

Ali, Muhammad Hafiz and Abdul Rahim, Norhuda and Yahya, Mohamed Hisham Internal and external factors of dividend payout policy: Evidence from Malaysian Construction Sector / Muhammad Hafiz Ali, Norhuda Abdul Rahim and Mohamed Hisham Yahya. Journal of Academia, 9. pp. 173-182. ISSN 2289-6368

Abstract

This study is set to identify the internal and external determinants of dividend policy of Malaysian listed construction firms. In specific, this study (1) investigates which determinants strongly explain dividend policy’s proxy and (2) identifies the relationship between firms’ internal and external determinants with dividend policy’s proxy. This study’s specification model is developed using the Dividend Smoothing Theory. Four firms’ internal factors (EPS, SIZE, lagDIV, FCFps) and one firms’ external factor (MBeta) are investigated. Panel data regression analysis of Ordinary Pooled Least Squares, Fixed Effects Model and Random Effects model are used to investigate the identified factors. The findings highlight that the Fixed Effects Model is the most appropriate, with an explanatory power of 33.73%. Three firms’ internal factors variables (EPS, lagDIV, and FCFps) are significant and positively affect firms’ dividend policy. This study also investigates other empirically proven firm’s factors and found that they are not significant. Furthermore, they worsened the model’s explanatory power. Thus, proving a unique difference in dividend policy’s predictors of the different economic sectors.

Metadata

Item Type: Article
Creators:
Creators
Email / ID Num.
Ali, Muhammad Hafiz
UNSPECIFIED
Abdul Rahim, Norhuda
UNSPECIFIED
Yahya, Mohamed Hisham
UNSPECIFIED
Subjects: H Social Sciences > HG Finance > Financial management. Business finance. Corporation finance
H Social Sciences > HG Finance > Financial management. Business finance. Corporation finance > Dividends. Stock dividends. Dividend reinvestment
H Social Sciences > HG Finance > Financial management. Business finance. Corporation finance > Dividends. Stock dividends. Dividend reinvestment > Malaysia
Divisions: Universiti Teknologi MARA, Negeri Sembilan
Journal or Publication Title: Journal of Academia
UiTM Journal Collections: UiTM Journal > Journal of Academia (JoA)
ISSN: 2289-6368
Volume: 9
Page Range: pp. 173-182
Keywords: Malaysia, Dividend Pay-out Policy, Internal Factors, External Factors, Construction Sector
URI: https://ir.uitm.edu.my/id/eprint/53888
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