Devidend payment behaviour and its determinants: The Malaysian property sector

Disappearing dividend phenomenon remains unexplored in the Malaysian market. Therefore, this study investigates whether or not the phenomenon exists in the Malaysian property sector. This is achieved by observing dividend pattern in the sector between 2000 to 2013. The study investigates dividend pa...

Full description

Saved in:
Bibliographic Details
Main Author: Fadhirul Hisham, Aziz
Format: Thesis
Language:eng
eng
Published: 2014
Subjects:
Online Access:https://etd.uum.edu.my/4641/1/s814428.pdf
https://etd.uum.edu.my/4641/2/s814428_abstract.pdf
Tags: Add Tag
No Tags, Be the first to tag this record!
id my-uum-etd.4641
record_format uketd_dc
institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Abdullah, Nur Adiana Hiau
topic HG Finance
spellingShingle HG Finance
Fadhirul Hisham, Aziz
Devidend payment behaviour and its determinants: The Malaysian property sector
description Disappearing dividend phenomenon remains unexplored in the Malaysian market. Therefore, this study investigates whether or not the phenomenon exists in the Malaysian property sector. This is achieved by observing dividend pattern in the sector between 2000 to 2013. The study investigates dividend payout in the sector further by examining the factors that influence companies‟ decision to pay or not to pay dividends. Trend analysis was used to describe the dividend pattern over the period while logistic regression analysis was conducted to determine the factors that influence companies‟ payout decisions. Findings revealed an upward trend in the amount of dividends distributed in the sector over the period as well as in the number of dividend payers. The study provides evidence of dividend concentration in the property sector of Bursa Malaysia as results shows that a large portion of dividend paid out for all the years come from the top 10 payers. As revealed by the findings, the explanatory factors for dividend payout decisions in the Malaysian property sector include dividend premium, retained earnings to total equity, profitability, size, leverage, and past year dividend. Thus, findings of the study provide support for catering theory, lifecycle theory and dividend smoothing theory. Findings indicate that investment opportunities and crisis do not play any significant role in explaining payout decisions in the sector
format Thesis
qualification_name masters
qualification_level Master's degree
author Fadhirul Hisham, Aziz
author_facet Fadhirul Hisham, Aziz
author_sort Fadhirul Hisham, Aziz
title Devidend payment behaviour and its determinants: The Malaysian property sector
title_short Devidend payment behaviour and its determinants: The Malaysian property sector
title_full Devidend payment behaviour and its determinants: The Malaysian property sector
title_fullStr Devidend payment behaviour and its determinants: The Malaysian property sector
title_full_unstemmed Devidend payment behaviour and its determinants: The Malaysian property sector
title_sort devidend payment behaviour and its determinants: the malaysian property sector
granting_institution Universiti Utara Malaysia
granting_department Othman Yeop Abdullah Graduate School of Business
publishDate 2014
url https://etd.uum.edu.my/4641/1/s814428.pdf
https://etd.uum.edu.my/4641/2/s814428_abstract.pdf
_version_ 1747827771483095040
spelling my-uum-etd.46412022-05-18T02:00:15Z Devidend payment behaviour and its determinants: The Malaysian property sector 2014 Fadhirul Hisham, Aziz Abdullah, Nur Adiana Hiau Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HG Finance Disappearing dividend phenomenon remains unexplored in the Malaysian market. Therefore, this study investigates whether or not the phenomenon exists in the Malaysian property sector. This is achieved by observing dividend pattern in the sector between 2000 to 2013. The study investigates dividend payout in the sector further by examining the factors that influence companies‟ decision to pay or not to pay dividends. Trend analysis was used to describe the dividend pattern over the period while logistic regression analysis was conducted to determine the factors that influence companies‟ payout decisions. Findings revealed an upward trend in the amount of dividends distributed in the sector over the period as well as in the number of dividend payers. The study provides evidence of dividend concentration in the property sector of Bursa Malaysia as results shows that a large portion of dividend paid out for all the years come from the top 10 payers. As revealed by the findings, the explanatory factors for dividend payout decisions in the Malaysian property sector include dividend premium, retained earnings to total equity, profitability, size, leverage, and past year dividend. Thus, findings of the study provide support for catering theory, lifecycle theory and dividend smoothing theory. Findings indicate that investment opportunities and crisis do not play any significant role in explaining payout decisions in the sector 2014 Thesis https://etd.uum.edu.my/4641/ https://etd.uum.edu.my/4641/1/s814428.pdf text eng public https://etd.uum.edu.my/4641/2/s814428_abstract.pdf text eng public masters masters Universiti Utara Malaysia Al-Khasawneh, J., Shariff, M., & Al-Zubi, K. (2012). Propensity to pay dividends: Evidence from the US banking sector. International Journal of Economics and Finance, 4(9), 130-141. Al-Malkawi, H. A. N. (2007). Determinants of corporate dividend policy in Jordan: An application of the Tobit model. Journal of Economic and Administrative Sciences, 23(2), 44-70. Al-Malkawi, H. A. N., Bhatti, M. I., & Magableh, S. I. (2014). On the dividend smoothing, signaling and the global financial crisis. Economic Modelling, 42, 159–165. Al-Twaijry, A. A. (2007). Dividend policy and payout ratio: Evidence from the Kuala Lumpur stock exchange. The Journal of Risk Finance, 8(4), 349–363. Ali, F., & Recep, B. (2012). Yes, dividends are disappearing: Worldwide evidence. Journal of Banking & Finance 36 (2012), 662–677. Aivazian, V., & Booth, L. (2003). Do emerging market firms follow different dividend policies from U.S. firms?. The Journal of Financial Research, 26(30), 371-387. Apgar, W. (1990). Which housing policy is best?. Housing Policy Debate, 1(1), 1-32. Baker, H. K., Saadi, S., Dutta, S., & Gandhi, D. (2007). The perception of dividends by Canadian managers: New survey evidence. International Journal of Managerial Finance, 3(1), 70-91. Baker, M., & Wurgler, J. (2004), A catering theory of dividends, The Journal of Finance, 59(3), 1125-1165. Bank Negara Malaysia (2014). 2013 Annual Report. Retrieved from: http://www.bnm.gov.my/files/publication/ar/en/ 2013/ar2013_book.pdf. Bebczuk, R. (2004). Explaining dividend policies in Argentina. Documento de Trabajo, 50. Bhatacharya, S. (1979). Imperfect information, dividend policy and the “bird in hand” fallacy. Bell Journal of Economics, 10 (1979), 259–270. Black, F. (1976). The dividends puzzle. Journal of Portfolio Management, 2, 5–8. Brockman, P., & Unlu, E. (2009). Dividend policy, creditor rights, and the agency costs of debt. Journal of Financial Economics, 92, 276–299. Chahyadi, C. S., & Salas, J. M. (2012). Not paying dividends? A decomposition of the decline in dividend payers. Journal of Economics and Finance, 36(2), 443-462. Coulton, J. J., & Ruddock, C. (2011). Corporate payout policy in Australia and a test of the life‐cycle theory. Accounting & Finance, 51(2), 381-407. DeAngelo, H., DeAngelo, L., & Skinner, D. J. (2004). Are dividends disappearing? Dividend concentration and the consolidation of earnings. Journal of Financial Economics, 72(3), 425-456. DeAngelo, H., DeAngelo, L., & Stulz, R. M. (2006). Dividend policy and the earned/contributed capital mix: A test of the life-cycle theory. Journal of Financial Economics, 81(2), 227-254. Denis, D.J., & Osobov, I. (2008). Why do firms pay dividends? International evidence on the determinants of dividend policy. Journal of Financial Economics, 89, 62–82. Easterbrook, F. H. (1984). Two agency-cost explanations of dividends. The American Economic Review, 74(4), 650-659. Eije, H.V., & Megginson, W.L. (2008). Dividends and share repurchases in the European Union. Journal of Financial Economics, 89, 347–374. El-Ansary, O., & Gomaa, T. (2012). The life cycle theory of dividends: Evidence from Egypt. International Research Journal of Finance and Economics, 97, 72-80. Fama, E. F., & French, K. R. (2001). Disappearing dividends: Changing firm characteristics or lower propensity to pay?. Journal of Financial Economics, 60(1), 3-43. Farinha, J. (2003). Dividend policy, corporate governance and the managerial entrenchment hypothesis: An empirical analysis. Journal of Business Finance and Accounting, 30, 1173-1209. Ferris, S. P., Jayaraman, N. & Sabherwal, S. (2009). Catering effects in corporate dividend policy: The international evidence. Journal of Banking & Finance, 33(9), 1730-1738. Ferris, S. P., Sen, N., & Yui, H. P. (2006). Are fewer firms paying more dividends?: The international evidence. Journal of Multinational Financial Management, 16(4), 333-362. Grullon, G., & Michaely, R. (2002). Dividends, Share Repurchases, and the Substitution Hypothesis. The Journal of Finance, 57(4), 1649-1684. Grullon, G., Paye, B., Underwood, S., & Weston, J. P. (2011). Has the propensity to pay out declined? Journal of Financial and Quantitative Analysis, 46(1), 1-24. Haffner, M., & Oxley, M. (1999). Housing subsidies: Definitions and comparisons. Housing Studies, 14(2), 145-162. Hauser, R. (2013). Did dividend policy change during the financial crisis? Managerial Finance, 39, 584–606. Henderson Global Investors (2014). Henderson Global Dividend Index Report (Edition 3, August 2014). Retrieved from www.henderson.com/getdoc. ashx?id=25856. Hoberg, G., & Prabhala, R. (2009). Disappearing dividends, catering, and risk. Review of Financial Studies 22, 79–116. Isa, M. M. (1992). Dividend Policies and Practices of Listed Malaysian Companies. Securities Industry Review, 18(1), 53–64. Jasim, A., & Hameeda, A.H. (2011). Corporate dividend decisions: Evidence from Saudi Arabia. The Journal of Risk Finance, 12(1), 45-56. John. K., & Williams, J. (1985). Dividends, dilution and taxes: A signaling equilibrium. The Journal of Finance, 40(4), 1053-1070 Julio, B., & Ikenberry, D. L. (2004). Reappearing dividends. Journal of Applied Corporate Finance, 16(4), 89-100. Khani, A., & Dehghani, S. (2011). The effect of financial life cycle on dividend policy of listed companies in Tehran Stock Exchange. Interdisciplinary Journal of Contemporary Research in Business, 3(6), 621-626. Kirkulak, B., & Kurt, G. (2010). Are dividends disappearing or shrinking? Evidence from the Istanbul Stock Exchange. Emerging Markets Finance and Trade, 46(2), 38-52. Li, W., & Lie, E. (2006). Dividend changes and catering incentives, Journal of Financial Economics, 80(2), 293-308. Lintner, J. (1956). Distributions of incomes of corporations among dividends, retained earnings and taxes. American Economic Review, 46(2), 97-113. Lestari, J.S. (2012). Determinants of dividend decision: Evidence from the Indonesian Stock Exchange. Review of Intergrated Business and Economic Research, 1(1), 346-355. Luc, R., & Grzegorz, T. (2011). Patterns in payout policy and payout channel choice. Journal of Banking & Finance 35 (2011), 1477–1490. Maybank Investment Bank Berhad (2014). Maybank IB Research Sector Update (2014, January 8). Retrieved from: http://research.maybankib.com/ pdf/document/Property_SU_20140108_MKE_Draft_5624 .pdf. Miller, M., & Modigliani, F. (1961). Dividend policy, growth, and the valuation of shares. Journal of Business, 34, 411-433. Miller, M. H., & Rock, K. (1985). Dividend policy under assymetric information. The Journal of Finance, 40(4), 1031-1051. Ministry of Finance Malaysia. (2014). The Budget Speech (2015). Retrieved from: http://www.treasury.gov. my/pdf/budget/speech/bs15.pdf. Mollah, S. (2011). Do emerging markets firms follow different dividend policies. Studies in Economics and Finance, 28(2), 118-15. Omet, G. (2004). Dividend Policy Behaviour in the Jordanian Capital Market. International Journal of Business, 9(3), 288-300. Pandey, I. M. (2003). Corporate dividend policy and behaviour: The Malaysian evidence. Asian Academy of Management, 8(1), 17-32. Rashid, M., Mat Nor, F., & Ibrahim, I. (2013). Evidence of Dividend Catering Theory in Malaysia: Implications for Investor Sentiment. Contemporary Economics, 7(4), 99-109. Reddy, Y. S., & Rath, S. (2005). Disappearing dividends in emerging markets?: Evidence from India. Emerging Markets Finance and Trade, 41(6), 58-82. Ronapat, M., & Evans, M. (2005). Disappearing dividends in the Thai capital market: Changing firm characteristics or lower propensity to pay. Journal of Economic and Social Policy, 10(1), 7. Shin, M.S., Kwon, J.S., & Kim, S.E. (2010). Earned surplus and dividend policy: A test of the financial life cycle in Korean capital market. International Research Journal of Finance and Economics, 59, 86-100. Tangjitprom, N. (2013). Propensity to pay dividends and catering incentives in Thailand. Studies in Economics and Finance, 30(1), 45–55. Thanatawee, Y. (2013). Ownership structure and dividend policy: Evidence from Thailand. International Journal of Economics and Finance, 5(1), 121-132. Vieira, E., & Raposo, C. (2007). Lower propensity to pay dividends? New evidence from Europe. Retrieved from http://www.papers.ssrn.com. Valuation and Property Services Department (2013). The Malaysian House Price Index (Q3-Q4, 2013). Retrieved from:http://napic.jpph.gov.my/portal/ web/guest/publication?p_p_id=ViewPublishings_WAR _ViewPublishingsportlet&p_p_lifecycle=2&p_p_stat e=normal&p_p_mode=view&p_p_resource_id=fileList Download&p_p_cacheability=cacheLevelPage&p_p_col _id=column-1&p_p_col_count=1&_Vi. Yap, J. (2012, June 27). Malaysia among the highest in dividend payouts. Borneo post online. Retrieved from http://www.theborneopost.com/2012/06/27/ malaysia-among-thehighest-in-dividend-payouts/.