Business, Management and Accounting
4 years ago

Pakistani firms prioritize investments over dividends, impacting shareholder payouts.

2 views
RePEc: Research Papers in Economics
The determinants of dividend policy in Pakistan
Hafeez Ahmed, Attiya Yasmin Javid

Paper Summary

The study looked at why companies in Pakistan decide how much to pay out in dividends. They analyzed data from 320 non-financial firms from 2001 to 2006. The results showed that these firms base their dividend payments on their current earnings and past dividends. Companies with stable earnings tend to pay larger dividends. Also, firms with more ownership concentration and market liquidity pay more in dividends. On the other hand, firms with more investment opportunities and debt tend to pay less in dividends. Additionally, larger firms and those with higher market value prefer to invest in their assets rather than pay dividends to shareholders.

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