Dividend Policy in Malaysia: A Comparison of Determinants Pre and Post Malaysian Code on Corporate Governance
This study was aimed at examining the differences between dividend policy determinants pre- and post-Malaysian Code on Corporate Governance (MCCG) 2012. Several factors, including profitability, lagged dividend, free cash flow, debt, firm size, investment opportunities and market risk were tested. T...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English English |
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Perpustakaan UUM
2021
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| Subjects: | |
| Online Access: | https://eprints.ums.edu.my/id/eprint/32129/1/Dividend%20Policy%20in%20Malaysia.pdf https://eprints.ums.edu.my/id/eprint/32129/2/Dividend%20Policy%20in%20Malaysia1.pdf https://eprints.ums.edu.my/id/eprint/32129/ http://ijbf.uum.edu.my/images/ijbfvol16no22021/1-22.pdf https://doi.org/10.32890/ ijbf2021.16.2.1 |
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| Summary: | This study was aimed at examining the differences between dividend policy determinants pre- and post-Malaysian Code on Corporate Governance (MCCG) 2012. Several factors, including profitability, lagged dividend, free cash flow, debt, firm size, investment opportunities and market risk were tested. The study investigated a total number of 631 non-financial firms in Malaysia that covered 7830 firm-year observations from 2005 to 2011 (pre-MCCG) and from 2013 to 2019 (post-MCCG). The study used pooled Ordinary Least Square (OLS) and random and fixed effect, with a robust standard error. The results demonstrated that from seven factors tested only four factors were found to be significant in determining dividend policy in pre-MCCG, and five factors in post MCCG. The pre-MCCG test revealed that before the revised MCCG 2012, the factors determining dividend policy were as follows: profitability, lagged dividend, debt, and firm size. However, there were slight changes in the range of determinants affecting dividend policy, Post-MCCG 2012. The post MCCG test revealed that profitability, lagged of dividend, and firm size consistently determined firm dividend policy; however, debt was no longer a significant determinant of dividend policy post MCCG. Additionally, investment opportunity and market risk were found to be significant determinants of dividend policy post-MCCG in 2012. |
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