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.
|Number of pages||36|
|Journal||International Journal of Banking, Accounting and Finance|
|Early online date||13 Jan 2020|
|Publication status||Published - Jan 2020|
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- Payout policy
- Sentiment index
- Market volatility
ASJC Scopus subject areas