ARTICLE

DETERMINANTS OF DIVIDEND POLICY AND ITS IMPACT ON FIRMS VALUE AN EVIDENCE OF AUTOMOBILE SECTOR IN PAKISTAN

  1. HOME
  2. ARTICLE

11 Pages : 94-110

http://dx.doi.org/10.31703/gsssr.2022(VII-II).11      10.31703/gsssr.2022(VII-II).11      Published : Jun 2022

Determinants of Dividend Policy and its Impact on Firm's Value: An Evidence of Automobile Sector in Pakistan

Abstract

    Research on a company's dividend policy is crucial because it ultimately affects the growth and performance of the company. The study's objective is to determine the variables that affect dividend policy, and both micro and macroeconomic indicators have been selected. Dividend policy is an important factor that successfully mediates the connection between certain economic variables and the firm value. Data were gathered from five publicly traded automobile firms in Pakistan for the years 2011 to 2021. The stock price valuation of automobile companies has been determined using the Linear Regression Model for relationship analysis of variables and the Sobel test method for the mediation impact of dividend policy. The study's findings demonstrate that economic variables like micro and macro include a most important impact on the dividend policy, and the results of the Sobel technique and findings on the stock prices of Pakistan’s automobile firms confirm these findings.

    Dividend Policy, Stock Price, Dividend Yield, Retain Earnings, DPR, Taxation Policy, Inflation, Linear Regression, Sobel Test

    (1) Asadullah Memon
    Research Scholar, Mehran University, Institute of Science Technology and Development, MUET, Jamshoro, Sindh, Pakistan.
    (2) Arifa Bano Talpur
    Assistant Professor, Mehran University, Institute of Science Technology and Development, MUET, Jamshoro, Sindh, Pakistan.
Fulltext PDF

References

  • Ahmed, N. Nazeer, M. & Abbas, N. (2021). Accelerating Company Performance through Dividend Payout Policy: A Trend Analysis of Automobile Sector Listed in Pakistan Stock Exchange. Journal of Accounting and Finance in Emerging Economies, 7(1), 117–141. https://doi.org/10.26710/jafee.v7i1.1572
  • Ahmed, W., & Idrees, M. A. (2020). The Impact of Dividend Policy on Share Prices, 01 Indus Journal of Management Sciences (IJMS)., 1(1), 1- 21. https://www.indus.edu.pk/pdf/issue1/1.pdf
  • Bushra, A., & Mirza, N. (2015). The Determinants of Corporate Dividend Policy in Pakistan, the Lahore Journal of Economics, 20 (2), 77- 98.
  • Gohar, R. & Alam, S, M. (2018). Determinants and Behavior of Dividend Policy in Pakistani Listed Companies, Journal of Finance and Investment Analysis, 7 (3), 1-9. https://ideas.repec.org/a/spt/fininv/v7y2018i3f7_3_1.html
  • Haider, M., & Maqbool, F. (2016). Impact of Dividend Policy on Market Capitalization of Firms Listed in Automobile Sector of KSE, RADS, 3 (2). 1-10.
  • Iqbal, Z., Waseem, A. M. & Asad, M. (2014). Impact of Dividend Policy on Shareholders’ Wealth: A Study of Selected Manufacturing Industries of Pakistan, International Journal of Innovation and Applied Studies. 6 (2), 1- 6.
  • Khadija, F., Irshad., Sadia., Khakwani., Shamsi, M., Ishaque., Ansari, S., & Younus, N. (2017). Impact of dividend policy on shareholders wealth and firm performance, Cogent Business & Management 4, 1- 12.
  • Khan, N, M. Nadeem, B., Islam, F., Salman, M. & Gill, S, I, M, H. (2016). Impact of Dividend Policy on Firm Performance: Empirical Evidence from Pakistan Stock Exchange, American Journal of Economics, Finance and Management, 2 (4), 1 – 7.
  • Nazir, S. M., Nawaz, M. M., Anwar, W., & Ahmed F. (2010). Determinants of Stock Price Volatility in Karachi Stock Exchange: The Mediating Role of Corporate Dividend Policy, International Research Journal of Finance and Economics, 55, 1- 8.
  • Ozuomba, C., Anichebe, A., & Okoye, P. (2016). The effect of dividend policies on wealth maximization – a study of some selected plcs. Cogent Business &Amp; Management, 3(1), 1226457. https://doi.org/10.1080/23311975.2016.1226457
  • Raza, H., Krishan, R. S., Gillani, H. A. M. S., & Gillani, H, A, M, S. (2020). Firm-specific factors of share prices: an empirical evidence from automobile sector in PAKISTAN. International Journal of Management. 11(8). 1690 – 1698. https://doi.org/10.34218/IJM.11.8.2020.150
  • Soomro, A, I., Ghumro, A. I., Abidi, R. A., & Lashari, A. H. (2019). An Evaluative Study of Impact of Dividend Policy Exhibiting on Stock Prices of, SALU-Commerce & Economics Review., 5 (01). 1- 12. https://doi.org/10.5281/zenodo.3692297
  • Sumathy, N., & Rajasekaran, D. (2019). Determinants of Dividend Policy in Indian Automobile Industry, 5 History Research Journal, 5(6). 1- 7.
  • Wet, De. J., & Pinda, M. M. (2013). The Impact Of Dividend Payments On Shareholders Wealth: Evidence From The Vector Error Correction Model. International Business &Amp; Economics Research Journal (IBER), 12(11), 1451. https://doi.org/10.19030/iber.v12i11.8182

Cite this article

APA

    APA : Memon, A., & Talpur, A. B. (2022). Determinants of Dividend Policy and its Impact on Firm's Value: An Evidence of Automobile Sector in Pakistan. Global Strategic & Security Studies Review, VII(II), 94-110. https://doi.org/10.31703/gsssr.2022(VII-II).11

CHICAGO

    CHICAGO : Memon, Asadullah, and Arifa Bano Talpur. 2022. "Determinants of Dividend Policy and its Impact on Firm's Value: An Evidence of Automobile Sector in Pakistan." Global Strategic & Security Studies Review, VII (II): 94-110 doi: 10.31703/gsssr.2022(VII-II).11

HARVARD

    HARVARD : MEMON, A. & TALPUR, A. B. 2022. Determinants of Dividend Policy and its Impact on Firm's Value: An Evidence of Automobile Sector in Pakistan. Global Strategic & Security Studies Review, VII, 94-110.

MHRA

    MHRA : Memon, Asadullah, and Arifa Bano Talpur. 2022. "Determinants of Dividend Policy and its Impact on Firm's Value: An Evidence of Automobile Sector in Pakistan." Global Strategic & Security Studies Review, VII: 94-110

MLA

    MLA : Memon, Asadullah, and Arifa Bano Talpur. "Determinants of Dividend Policy and its Impact on Firm's Value: An Evidence of Automobile Sector in Pakistan." Global Strategic & Security Studies Review, VII.II (2022): 94-110 Print.

OXFORD

    OXFORD : Memon, Asadullah and Talpur, Arifa Bano (2022), "Determinants of Dividend Policy and its Impact on Firm's Value: An Evidence of Automobile Sector in Pakistan", Global Strategic & Security Studies Review, VII (II), 94-110

TURABIAN

    TURABIAN : Memon, Asadullah, and Arifa Bano Talpur. "Determinants of Dividend Policy and its Impact on Firm's Value: An Evidence of Automobile Sector in Pakistan." Global Strategic & Security Studies Review VII, no. II (2022): 94-110. https://doi.org/10.31703/gsssr.2022(VII-II).11