Determinants and stability of dividend payment: the case of Malaysian public-listed Shariah-compliant firms
The purpose of this paper was to examine the determinants and stability of dividend payments in Malaysia from 2007 to 2016. The purposes of this research were (1) to analyse the stability of dividend per share, (2) to examine the determinants of dividend yield, and (3) to examine the effect of d...
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| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2020
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| Online Access: | http://journalarticle.ukm.my/16895/1/39493-145640-1-PB.pdf http://journalarticle.ukm.my/16895/ https://ejournals.ukm.my/pengurusan/issue/view/1366 |
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| Summary: | The purpose of this paper was to examine the determinants and stability of dividend payments in Malaysia from
2007 to 2016. The purposes of this research were (1) to analyse the stability of dividend per share, (2) to examine
the determinants of dividend yield, and (3) to examine the effect of dividend per share on the sustainable growth
rate of Shariah-compliant firms in Malaysia. Static model and dynamic model estimated using Generalised
Method of Moment were used in this research. The results indicated that the stable earnings per share can afford
the firms to pay a larger dividend. Futhermore, the higher dividend from the previous year with the lower speed
adjustment indicated high smoothing and stability of dividend payment. The results on determinants of the
dividend yield revealed the five factors that are lagged dividend yield, firm size, sales growth, leverage, and
market value to book value have a significant impact on dividend yield, with lagged dividend yield and firm size
showing a significant positive effect, while sales growth, leverage, and market value to book value have a
significant negative impact. In addition, the results indicated that dividend per share had a significantly positive
impact on the sustainable growth rate. The results of this study are important for the management team of
companies to decide an appropriate dividend policy for the company to maintain a stable dividend payment and
have the financial health of a company, These results also provided the understanding of dividend policy
behaviour in Malaysia, particularly on Malaysian public-listed Shariah-compliant firms. |
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