Corporate cash holdings and dividend payments

Evidence from simultaneous analysis

Basil Al-Najjar, Yacine Belghitar

Research output: Contribution to journalArticle

37 Citations (Scopus)

Abstract

This study explores the simultaneous relationship between corporate cash holdings and dividend policy using a large sample of around 400 non-financial firms for the period from 1991 to 2008. The results show that cash holdings are affected by dividends, leverage, growth, size, risk, profitability, and working capital ratio. Dividend policy is affected by cash, leverage, growth, size, risk, and profit. When controlling for simultaneity, dividend payments do not appear to significantly affect cash holdings, nor do cash holdings affect dividend policy. The empirical analysis suggests that simultaneity is crucial in analyzing corporate cash holdings and dividend policy.
Original languageEnglish
Pages (from-to)231-241
Number of pages11
JournalManagerial and Decision Economics
Volume32
Issue number4
Early online date12 Jan 2011
DOIs
Publication statusPublished - Jun 2011
Externally publishedYes

Fingerprint

Profitability
Cash dividends
Payment
Cash holdings
Dividend policy
Dividends
Leverage
Simultaneity

Cite this

@article{51fc8748d793495fb7cfe10183b13ec8,
title = "Corporate cash holdings and dividend payments: Evidence from simultaneous analysis",
abstract = "This study explores the simultaneous relationship between corporate cash holdings and dividend policy using a large sample of around 400 non-financial firms for the period from 1991 to 2008. The results show that cash holdings are affected by dividends, leverage, growth, size, risk, profitability, and working capital ratio. Dividend policy is affected by cash, leverage, growth, size, risk, and profit. When controlling for simultaneity, dividend payments do not appear to significantly affect cash holdings, nor do cash holdings affect dividend policy. The empirical analysis suggests that simultaneity is crucial in analyzing corporate cash holdings and dividend policy.",
author = "Basil Al-Najjar and Yacine Belghitar",
year = "2011",
month = "6",
doi = "10.1002/mde.1529",
language = "English",
volume = "32",
pages = "231--241",
journal = "Managerial and Decision Economics",
issn = "0143-6570",
publisher = "John Wiley and Sons Ltd",
number = "4",

}

Corporate cash holdings and dividend payments : Evidence from simultaneous analysis. / Al-Najjar, Basil; Belghitar, Yacine.

In: Managerial and Decision Economics, Vol. 32, No. 4, 06.2011, p. 231-241.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Corporate cash holdings and dividend payments

T2 - Evidence from simultaneous analysis

AU - Al-Najjar, Basil

AU - Belghitar, Yacine

PY - 2011/6

Y1 - 2011/6

N2 - This study explores the simultaneous relationship between corporate cash holdings and dividend policy using a large sample of around 400 non-financial firms for the period from 1991 to 2008. The results show that cash holdings are affected by dividends, leverage, growth, size, risk, profitability, and working capital ratio. Dividend policy is affected by cash, leverage, growth, size, risk, and profit. When controlling for simultaneity, dividend payments do not appear to significantly affect cash holdings, nor do cash holdings affect dividend policy. The empirical analysis suggests that simultaneity is crucial in analyzing corporate cash holdings and dividend policy.

AB - This study explores the simultaneous relationship between corporate cash holdings and dividend policy using a large sample of around 400 non-financial firms for the period from 1991 to 2008. The results show that cash holdings are affected by dividends, leverage, growth, size, risk, profitability, and working capital ratio. Dividend policy is affected by cash, leverage, growth, size, risk, and profit. When controlling for simultaneity, dividend payments do not appear to significantly affect cash holdings, nor do cash holdings affect dividend policy. The empirical analysis suggests that simultaneity is crucial in analyzing corporate cash holdings and dividend policy.

U2 - 10.1002/mde.1529

DO - 10.1002/mde.1529

M3 - Article

VL - 32

SP - 231

EP - 241

JO - Managerial and Decision Economics

JF - Managerial and Decision Economics

SN - 0143-6570

IS - 4

ER -