Determinants of dividend payout decisions – the case of publicly quoted food industry enterprises operating in emerging markets

• Main Authors: Justyna Franc-Dąbrowska, Magdalena Mądra-Sawicka, Magdalena Ulrichs
• Format: Article
• Language: English
• Published: Taylor & Francis Group 2020-01-01
• Series: Ekonomska Istraživanja
• Subjects: dividend policy; cash dividend; emerging markets; emerging european countries; food industry; panel probit model
• Online Access: http://dx.doi.org/10.1080/1331677X.2019.1631201

The paper examines the factors influencing dividend payout decisions. Our analysis is based on unbalanced panel data with 799 observations of companies from 15 countries over a period of 14 years. The study develops eight research hypotheses and uses a modelling approach based on the random effects panel probit model. An important conclusion reached in our study is that a company’s financial situation in preceding year influences the dividend payout decision. In addition, the key significant determinants of dividend payout decision in the period covered by our study include free cash flow, growth, liquidity, profitability and size. These important research results are confirmed by other studies in the field. They are therefore essential for determining dividend policies. Individual effects across investigated enterprises also played an important role in the dividend policy.