Journal Screenshot

International Journal of Academic Research in Business and Social Sciences

Open Access Journal

ISSN: 2222-6990

Dividend Payout Determinants: Evidence of Healthcare Companies in Malaysia

Ruziah A. Latif, Syafiqah Jalil, Zuraidah Ahmad

http://dx.doi.org/10.6007/IJARBSS/v11-i8/10734

Open access

The study of what influences the dividend payout policy remains highly relevant as it is an important factor that is being considered by both companies and investors. This study attempts to investigate the significant factors that affect the dividend payout of healthcare companies in Malaysia. To meet the objective of this study, 10 years financial data from a sample of healthcare companies listed on the main board of Bursa Malaysia is analysed to investigate the effect of the determinants towards the dividend payout ratio. Correlation analysis and multiple linear regression analysis are applied to determine the relationship between variables and the effect of the independent variables towards the dividend payout. The findings indicate that liquidity, investment opportunity, leverage and company size are significant in determining the dividend payout ratio of Malaysia healthcare companies.

Abor, J., & Bokpin, G. A. (2010). Investment opportunities, corporate finance, and dividend payout policy: Evidence from emerging markets. Studies in Economics and Finance, 27 (3), 180-194.
Afza, T., & Nazir, M. S. (2008). Working capital approaches and firm's returns in Pakistan. Pakistan Journal of Commerce and Social Sciences, 1, 25-36.
Al Sawalqa, F. A. (2021). Life-cycle theory of corporate dividend policy in Jordan: The role of equities, assets, and age during the period 2015-2019. The Journal of Asian Finance, Economics and Business, 8(6), 1-11.
Al-Twaijry, A. A. (2007). Dividend policy and payout ratio: evidence from the Kuala Lumpur stock exchange. Journal of Risk Finance, 8(4), 349-363.
Amidu, M., & Abor, J. (2006). Determinants of dividend payout ratios in Ghana. Journal of Risk Finance, 7(2), 136-145.
Arko, A. C., Abor, J. Y., Adjasi, C. K. D., & Amidu, M. (2014). What influence dividend decisions of firms in Sub-Saharan African? Journal of Accounting in Emerging Economies, 4(1), 57-78.
Awad, B. (2015). Determinants of dividend policy in Kuwait Stock Exchange. International Journal of Business and Management Review, 3(9), 72-78.
Banerjee, S. (2017). Determinants of dividend policy of listed information technology companies in India. SCMS Journal of Indian Management, 14(3), 54-63.
Chakraborty, S., Shenoy, S. S., & Kumar, S. N. (2018). Empirical evidence on the determinants of dividend pay-outs in the auto components sector in India. Investment Management and Financial Innovations, 15(4), 356-366.
Danila, N., Noreen, U., Azizan, N. A., & Farid, M. (2020). Growth opportunities, capital structure and dividend policy in emerging market: Indonesia case of study. Journal of Asian Finance Economics and Business, 7(10), 1-8.
DeAngelo, H., DeAngelo, L., & Skinner, D. (2004). Are dividends disappearing? Dividend concentration and the consolidation of earnings. Journal of Financial Economics, 72, 425-456.
Dewasiri, N. J., Yatiwelle Koralalage, W. B., Abdul Azeez, A., Jayarathne, P. G. S. A., Kuruppuarachchi, D., & Weerasinghe, V. A. (2019). Determinants of dividend policy: evidence from an emerging and developing market. Managerial Finance, 45(3), 413-429.
Farre-Mensa, J., Michaely, R., & Schmalz, M. C. (2014). Payout policy. Annual Review of Financial Economics, 6, 75-134.
Fitri, R. R., Hosen, M. N., & Muhari, S. (2016). Analysis of factors that impact dividend payout ratio on listed companies at Jakarta Islamic Index. International Journal of Academic Research in Accounting, Finance and Management Sciences, 6(2), 87-97.
George, D., & Mallery, M. (2010). SPSS for Windows Step by Step: A Simple Guide and Reference, (10th Ed.) Boston: Pearson Education.
Gordon, M. J. (1959). Dividends, earnings, and stock prices. The Review of Economics and Statistics, 99-105.
Hair, J. F., Black, W., Babin, B. J., & Anderson, R. (2010). Multivariate Data Analysis (7th Ed.). Upper Saddle River, NJ: Pearson
Hashim, S. L. M. (2017). Analysis on dividend payout: Empirical evidence of property companies in Malaysia. International Journal of Industrial Management, 3, 61-71.
Hellstrom, G., & Inagambaev, G. (2012). Determinants of dividend payout ratios A study of Swedish large and medium caps. Umea School of Business & Economics, 1-77.
Ho, H. (2003). Dividend policies in Australia and Japan. International Advances in Economic Research, 9 (2), 91-100.
Imran, K. (2011). Determinants of dividend payout policy: A case of Pakistan engineering sector. The Romanian Economic Journal, 41, 47-60.
Issa, A. I. F. (2015). The determinants of dividend policy: Evidence from Malaysian firms. Research Journal of Finance and Accounting, 6(18), 69-87.
Jaara, B., Alashhab, H., & Jaara, O. O. (2018). The determinants of dividend policy for non-financial companies in Jordan. Journal of Economics and Financial Issues, 8(2), 198-209.
Jensen, M. C. (1986). Agency costs of free cash flows, corporate finance and takeovers. The American Economic Review. 76(2), 323-329.
Kasahara, A., & Orihara, M. (2021). Family firms' dividend policies: Evidence from a Japanese tax reform. Finance Research Letters, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3858212
Ka?mierska-Jó?wiak, B. (2015). Determinants of dividend policy: Evidence from Polish listed companies. Procedia Economics and Finance, 23, 473-477.
Khan, F. A., & Ahmad, N. (2017). Determinants of dividend payout: An empirical study of pharmaceutical companies of Pakistan Stock Exchange. Journal of Financial Studies & Research, 1-16.
Khan, F. (2020). Firm earning and dividend policy: A case of Malaysian stock market. SSRG International Journal of Economics and Management Studies (SSRG-IJEMS), 7 (1), 145-158.
Kowalewski, O., Stetsyuk, I., & Talavera, O. (2007). Corporate governance and dividend policy in Poland, German Institute for Economic Research.
Lintner, J. (1965). The valuation of risk assets and the selection of risky investments in stock portfolios and capital budgets. The Review of Economics and Statistics, 47(1), 13-37.
Maldajian, C., & El Khoury, R. M. (2014). Determinants of the dividend policy: An empirical study on the Lebanese Listed Banks. International Journal of Economics and Finance, 6(4), 240-256.
Malik , F., Gul , S. , Khan, M. T., Rehman, S., & Khan, M. (2013). Factors influencing corporate dividend payout decisions of financial and non-financial firms. Research Journal of Finance and Accounting, 4(1), 35-46.
Manneh, M. A., & Naser, K. (2015). Determinants of corporate dividends policy: evidence from an emerging economy. International Journal of Economics and Finance, 7(7), 229-239.
Mazengo, S. D., & Mwaifyusi, H. A. (2021). The effect of liquidity, profitability and company size on dividend payout: Evidence from financial institutions listed in Dar Es Salaam Stock Exchange. Business Education Journal, 1(2), 1-12.
Mehar, A. (2003). Corporate governance and dividend policy. MPRA Paper 619. https://mpra.ub.uni-muenchen.de/619/1/MPRA_paper_619.pdf
Mehta, A. (2012). An empirical analysis of determinants of dividend policy: Evidence from the UAE companies. Global Review of Accounting and Finance, 3(1), 18-31.
Miller, M., & Modigliani, F. (1961). Dividend policy, growth, and the valuation of shares. The Journal of Business, 34, 411.
Naceur, S. B., Goaied, M., & Belanes, A. (2006). On the determinants and dynamics of dividend policy, International Review of Finance, 6(1-2), 1-23.
Okoro, C. Y., Ezeabasili, V., & Alajekwu, U. B. (2018). Analysis of the determinants of dividend payout. Annals of Spiru University, 1, 141–166.
Olarewaju, O. M., Migiro, S. O., & Sibanda, M. (2019). Examining bank-specific determinants of the dividend payout ratio of Sub-Saharan Africa banks: The panel GMM approach. Afro-Asian Journal of Finance and Accounting, 9(1), 40–59.
Ong C. L., Thaker, H.M.T., Khaliq, A., & Thaker, M. A. M. T. (2018). The determinants of dividend payout: Evidence from the Malaysian property market. Iqtishadia, 11(1), 27-46.
Patra, S., Poshakwale, T., & Ow-Yeong, K. (2012). Determinants of corporate dividend policy in Greece. Applied Financial Economics, 22(13), 1079-1087.
Putri, C. C. P., & Ugut, G. S. S. (2021). Factors affecting dividend payout ratio in LQ-45 (non-banking) companies listed in Indonesia Stock Exchange, 2011-2019. Enrichment: Journal of Management, 11(2), 225-230.
Setiawan, D. E., & Rahmawati, I. Y. (2020). The Effect of Liquidity, Profitability, Leverage on Corporate Value with dividend policy and bi rate as moderated variables (Study of banking companies listed on the Indonesia Stock Exchange in 2014-2017. Economics and Business Solutions Journal, 4(1), 1-19.
Suji, T. (2010). What are the determinants of dividend policy?. Business and Economics Journal, 9(5), 188-500.
Susanto, A., & Tirok, J. (1387). Dividend payout ratio: Factors that affect it, and subsequent earning growth. Journal of Applied Finance and Accounting, 6(1), 97-111.
Tamrin, M., Mus, H. R., & Arfah, A. (2018). Effect of profitability and dividend policy on corporate governance and firm value: Evidence from the Indonesian manufacturing sectors. IOSR Journal of Business and Management (IOSR-JBM), 19(10), 66-74.
Tariq, A. (2018). The joint-determinants of leverage and dividend policy: A balanced panel study of non financial firms of India and Pakistan. Germany: European Scientific Journal, 11(10), 311-324.
Thirumagal, P. G., & Vasantha, S. (2017). Dividend payout determinants: Evidence from Indian Industries. International Journal of Pure and Applied Mathematics, 117(21), 811-829.
Trang, N. T. X. (2012). Determinants of dividend policy: The case of Vietnam. International Journal of Business, Economics and Law, 1, 48-57.
Widyasti, I. G. A. V., & Putri, I. G. A. M. A. D. (2021). The Effect of Profitability, Liquidity, Leverage, Free Cash Flow, and Good Corporate Governance on Dividend Policies (Empirical Study on Manufacturing Companies Listed in Indonesia Stock Exchange 2017-2019). American Journal of Humanities and Social Sciences Research, 5(1), 269-278.
Yong, T. M., & Mustapha, M. (2016). Determinants of dividend payout ratio: Evidence from Malaysian public listed firms. Journal of Applied Environmental and Biological Sciences, 6(15), 48-54.
Yusof, Y., & Ismail, S. (2016). Determinants of dividend policy of public listed companies in Malaysia. Review of International Business and Strategy, 26 (1),88 -99.

In-Text Citation: (Latif et al., 2021)
To Cite this Article: Latif, R. A., Jalil, S., & Ahmad, Z. (2021). Dividend Payout Determinants: Evidence of Healthcare Companies in Malaysia. International Journal of Academic Research in Business and Social Sciences, 11(8), 317–329.