The propensity to pay dividends: empirical evidence from the MENA region

Panos Andrikopoulos, Osama El-Ansary, Walid Ibrahim Hassan

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Abstract

This paper investigates the relation between stock market sentiment and firms’ propensity to pay dividends in the MENA region for the period 2000- 2015. Using conventional determinants of cash distributions as control variables, our results show that the tendency to pay dividends is negatively related to the aggregate investors’ sentiment but positively related to the dividend premium. Unlike prior literature, we report no association between firms’ dividend policy and issues of stock market liquidity. Overall, we suggest that corporate payout policies in the case of the MENA region can best be explained by the dividend catering hypothesis.
Original languageEnglish
Pages (from-to)136-171
Number of pages36
JournalInternational Journal of Banking, Accounting and Finance
Volume11
Issue number1
Early online date13 Jan 2020
DOIs
Publication statusPublished - Jan 2020

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Keywords

  • Dividends
  • Payout policy
  • Sentiment index
  • Market volatility

ASJC Scopus subject areas

  • Finance

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