Determinants of Corporate Dividends Policy: An Empirical Evidence from Palestine رسالة ماجستير

Abstract

This Empirical research aims at investigating the impact of factors that determine the dividends policy in non-financial companies in Palestine. For this purpose, the data was collected from the annual reports of sample companies that had a continuous financial reporting though the period between 2013 and 2016. The dividends payout ratio was used as a dependent variable to measure the dividends policy, while the following eleven independent variables were used as hypothesized determinants: Financial Leverage, Firm Size, Revenue Growth, Industry Type, ownership concentration, Profitability, free cash flows, Business Risk, Firm Age, Return on Assets, and Previous Year Dividends. The population consisted of 49 companies, two samples were tested to achieve the research purpose. Sample one included 32 companies that meet the sampling criteria, but revealed no significant variable to dividends policy, since there are 13 companies that had never paid dividends within the mentioned period, and represented outliers that confused results. Alternatively, sample two included the only 19 companies that paid dividends once at least between 2013 and 2016. The Multiple Linear Regression test at 95% confidence was used and resulted in five significant variables. The profitability, free cash flows, and business risk seemed to have a positive relationship with dividends payout, while Return on assets and revenue growth had a negative association with dividends payout... Overall, the adjusted R2 = 0.713. This measure is acceptable, and reveals the resulted model interpret 71.3% of dividends policy determinants.