Revisiting Firm-Specific Determinants of Dividend Policy

Evidence from Turkey

Research output: Contribution to journalArticle

Abstract

This study investigates the effects of firm-specific factors on dividend policies of Turkish publicly listed firms in the post-2003 period. The paper focuses on this period, because Turkish authorities and regulators implemented various major economic and structural reforms for market integration and made significant changes in the regulatory framework of cash dividend policy rules starting with the fiscal year 2003. We analyse a panel dataset of 264 firms traded in the Istanbul Stock Exchange (ISE) over the period 2003-2012 and our results reveal that profitability, debt, growth, firm age and firm size are the most important firm-specific characteristics determining cash dividend payment decisions of ISE-listed firms. The findings, thus, suggest that more profitable, more mature and larger size firms are more likely to pay dividends (and distribute higher dividends), whereas firms with higher growth (investment opportunities) and more debt are less likely to pay dividends (and distribute lower dividends) in the Turkish market. Overall, we detect that the firm-specific determinants that affect corporate dividend policies of ISE firms do follow similar patterns of dividend policy factors in more developed economies after the implementation of major developments in the post-2003 period, and hence such reforms make Turkish firms to be comparable to their counterparts in developed markets in terms of dividend policy setting process.
Original languageEnglish
Pages (from-to)3-34
Number of pages32
JournalEconomic Issues
Volume23
Issue number1
Publication statusPublished - 1 Mar 2018

Fingerprint

Turkey
Dividend policy
Dividends
Istanbul stock exchange
Debt
Firm size
Cash dividends
Authority
Fiscal
Firm age
Profitability
Structural reforms
Regulatory framework
Economic reform
Factors
Payment
Policy rules
Firm-specific factors
Firm-specific characteristics
Investment opportunities

Cite this

@article{153e53c7a3f5425fb600e0a18a14f8dd,
title = "Revisiting Firm-Specific Determinants of Dividend Policy: Evidence from Turkey",
abstract = "This study investigates the effects of firm-specific factors on dividend policies of Turkish publicly listed firms in the post-2003 period. The paper focuses on this period, because Turkish authorities and regulators implemented various major economic and structural reforms for market integration and made significant changes in the regulatory framework of cash dividend policy rules starting with the fiscal year 2003. We analyse a panel dataset of 264 firms traded in the Istanbul Stock Exchange (ISE) over the period 2003-2012 and our results reveal that profitability, debt, growth, firm age and firm size are the most important firm-specific characteristics determining cash dividend payment decisions of ISE-listed firms. The findings, thus, suggest that more profitable, more mature and larger size firms are more likely to pay dividends (and distribute higher dividends), whereas firms with higher growth (investment opportunities) and more debt are less likely to pay dividends (and distribute lower dividends) in the Turkish market. Overall, we detect that the firm-specific determinants that affect corporate dividend policies of ISE firms do follow similar patterns of dividend policy factors in more developed economies after the implementation of major developments in the post-2003 period, and hence such reforms make Turkish firms to be comparable to their counterparts in developed markets in terms of dividend policy setting process.",
author = "Basil Al-Najjar and Erhan Kilincarslan",
year = "2018",
month = "3",
day = "1",
language = "English",
volume = "23",
pages = "3--34",
journal = "Economic Issues",
issn = "1363-7029",
publisher = "Economic Issues Education Trust",
number = "1",

}

Revisiting Firm-Specific Determinants of Dividend Policy : Evidence from Turkey. / Al-Najjar, Basil; Kilincarslan, Erhan.

In: Economic Issues, Vol. 23, No. 1, 01.03.2018, p. 3-34.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Revisiting Firm-Specific Determinants of Dividend Policy

T2 - Evidence from Turkey

AU - Al-Najjar, Basil

AU - Kilincarslan, Erhan

PY - 2018/3/1

Y1 - 2018/3/1

N2 - This study investigates the effects of firm-specific factors on dividend policies of Turkish publicly listed firms in the post-2003 period. The paper focuses on this period, because Turkish authorities and regulators implemented various major economic and structural reforms for market integration and made significant changes in the regulatory framework of cash dividend policy rules starting with the fiscal year 2003. We analyse a panel dataset of 264 firms traded in the Istanbul Stock Exchange (ISE) over the period 2003-2012 and our results reveal that profitability, debt, growth, firm age and firm size are the most important firm-specific characteristics determining cash dividend payment decisions of ISE-listed firms. The findings, thus, suggest that more profitable, more mature and larger size firms are more likely to pay dividends (and distribute higher dividends), whereas firms with higher growth (investment opportunities) and more debt are less likely to pay dividends (and distribute lower dividends) in the Turkish market. Overall, we detect that the firm-specific determinants that affect corporate dividend policies of ISE firms do follow similar patterns of dividend policy factors in more developed economies after the implementation of major developments in the post-2003 period, and hence such reforms make Turkish firms to be comparable to their counterparts in developed markets in terms of dividend policy setting process.

AB - This study investigates the effects of firm-specific factors on dividend policies of Turkish publicly listed firms in the post-2003 period. The paper focuses on this period, because Turkish authorities and regulators implemented various major economic and structural reforms for market integration and made significant changes in the regulatory framework of cash dividend policy rules starting with the fiscal year 2003. We analyse a panel dataset of 264 firms traded in the Istanbul Stock Exchange (ISE) over the period 2003-2012 and our results reveal that profitability, debt, growth, firm age and firm size are the most important firm-specific characteristics determining cash dividend payment decisions of ISE-listed firms. The findings, thus, suggest that more profitable, more mature and larger size firms are more likely to pay dividends (and distribute higher dividends), whereas firms with higher growth (investment opportunities) and more debt are less likely to pay dividends (and distribute lower dividends) in the Turkish market. Overall, we detect that the firm-specific determinants that affect corporate dividend policies of ISE firms do follow similar patterns of dividend policy factors in more developed economies after the implementation of major developments in the post-2003 period, and hence such reforms make Turkish firms to be comparable to their counterparts in developed markets in terms of dividend policy setting process.

UR - http://www.economicissues.org.uk/Vol23.html

M3 - Article

VL - 23

SP - 3

EP - 34

JO - Economic Issues

JF - Economic Issues

SN - 1363-7029

IS - 1

ER -