The Dividend Payment Puzzle

Fenty Fauziah; Sri Wahyuni Jamal; Umi Kartini Rashid

doi:10.37366/ekomabis.v5i02.1442

Fenty Fauziah Universitas Muhammadiyah Kalimantan Timur
Sri Wahyuni Jamal Universitas Muhammadiyah Kalimantan Timur
Umi Kartini Rashid Universiti Tun Hussein Onn Malaysia

DOI: https://doi.org/10.37366/ekomabis.v5i02.1442

Keywords: Didivend Payments, Profitability, Tax Rates

Abstract

This study's objective is to ascertain and identify influencing the decision to pay dividends. Dividend data were subjected to fixed effects model. Panel regression analysis taken from annual reports issued by manufacturing companies listed on the BEI above 2016-2022 period. The affect dividends are ROA, DER, Size and TR. The company must pay attention to the overall factor that used, so that policies can be taken appropriately. Dividend payments are concentrated in large companies. Managers can use the empirical findings to make dividend payment decisions. The government learn from the impact of changes to the Job Creation Law and Income Tax Law, so that Indonesia becomes an investment destination. The dividend puzzle needs close attention to the different characteristics of firms in explanations for paying dividends.

References

Akib, M., Nurdin, E., Purnaman, S. M. N., & Anwar, F. (2023). Does Capital Structure, Profitability, and Dividend Policy Improve Stock Prices? International Journal of Professional Business Review, 8(6). https://doi.org/https://doi.org/10.26668/businessreview/2023.v8i6.2395

Al-Shubiri, F. N. (2011). The effect of Working Capital Practices on Risk Management: Evidence from Jordan. Global Journal of Business Research, 5(1), 39–54. https://ssrn.com/abstract=1873494

Almendros, J. A. C., & Mira, F. S. (2018). Costs Of Debt, Tax Benefits And A New Measure Of Non-Debt Tax Shields: Examining Debt Conservatism In Spanish Listed Firms. Revista de Contabilidad – Spanish Accounting Review, 21(2), 162–175. https://doi.org/10.1016/j.rcsar.2018.05.001

Analysights. (2010). Correcting for outliers. Wordpress.Com. https://analysights.wordpress.com/2010/09/15/correcting-for-outliers/

Ardiyanti, N. R. S. A. (2015). Pengaruh Faktor-Faktor Fundamental Dan Teknikal terhadap Dividend Payout Ratio. Jurnal Riset Akuntansi Dan Perpajakan, 2(2), 218–228. https://doi.org/10.35838/jrap.2015.002.02.19

Arjana, I. P. P. H., & Suputra, I. D. G. D. (2017). Pengaruh Profitabilitas, Leverage, Ukuran Perusahaan dan Corporate Social Responsibility pada Kebijakan Dividen. E-Jurnal Akuntansi, 21(3), 2021–2051. https://doi.org/10.24843/EJA.2017.v21.i03.p12

Arko, A. C., Abor, J., Adjasi, C. K., & Amidu, M. (2014). What Influence Dividend Decisions of Firms in Sub-Saharan Africa? Journal of Accounting in Emerging Economies, 4(1), 57–78. https://doi.org/10.1108/JAEE-12-2011-0053

Bae, B., & Elhusseiny, M. F. (2017). The Relationship Between Dividend Payment Patterns and Firm Characteristics. Growing Presence of Real Options in Global Financial Markets, 33, 33–42. https://doi.org/10.1108/S0196-382120170000033003

Baker, H. K., & Powell, G. E. (2012). Dividend Policy in Indonesia: Survey Evidence from Executives. Journal of Asia Business Studies, 6(1), 79–92. http://dx.doi.org/10.1108/15587891211191399

Baker, H. K., & Weigand, R. (2015). Corporate Dividend Policy Revisited. Managerial Finance, 41(2), 126–144. https://doi.org/10.1108/MF-03-2014-0077

Bergset, L. (2015). The Rationality and Irrationality of Financing Green Start-Ups. Journal Administrative Sciences, 5(4). http://dx.doi.org/10.3390/admsci5040260

Botoc, C., & Pirtea, M. (2014). Dividend payout-policy drivers: evidence from emerging countries. Emerging Markets Finance and Trade, 50(4), 95–112. http://dx.doi.org/10.2753/REE1540-496X5004S407

Bui, A. T., Pham, T. P., Pham, L. C., & Ta, T. K. Van. (2021). Legal And Financial Constraints And Firm Growth: Small And Medium Enterprises (SMEs) Versus Large Enterprises. Heliyon, 7(2). https://doi.org/10.1016/j.heliyon.2021.e08576

Chen, X., & Wu, C. (2022). Retail investor attention and information asymmetry: Evidence from China. Pacific-Basin Finance Journal, 75(1). https://doi.org/https://doi.org/10.1016/j.pacfin.2022.101847

Clayman, M. R., Fridson, M. S., & H, T. G. (2012). Corporate Finance: A Practical Approach (2nd Ed). New Jersey: John Wiley & Sons.

Deslandes, M., Landry, S., & Fortin, A. (2015). The Effects Of A Tax Dividend cut on Payout Policies: Canadian Evidence. International Journal of Managerial Finance, 11(1), 2–22. https://doi.org/10.1108/IJMF-05-2014-0081

Dewasiri, N. J., Yatiwelle Koralalage, W. B., 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. https://doi.org/10.1108/MF-09-2017-0331

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. https://doi.org/10.1016/S0304-405X(01)00038-1

Farida, I., & Setiawan, D. (2022). Business Strategies and Competitive Advantage: The Role of Performance and Innovation. Journal of Open Innovation Technology Market and Complexity, 8(3). http://dx.doi.org/10.3390/joitmc8030163

Firer, C., Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2012). Fundamentals of Corporate Finance (5th Ed). New York: McGraw-Hill Education.

Forti, C. A. B., Peixoto, F. M., & L, A. D. (2015). Determinant Factors of Dividend Payments in Brazil. Revista Contabilidade & Financas, 26(68), 67–180. https://doi.org/10.1590/1808-057x201512260

Gill, A., Biger, N., & Tibrewala, R. (2010). Determinants of Dividend Payout Ratios: Evidence from United States. The Open Business Journal, 3(1), 8–14. http://dx.doi.org/10.2174/1874915101003010008

Gordon, M. (1959). Dividends, Earnings and Stock Prices. Review of Economics and Statistics, 41(2), 99–105. https://doi.org/10.2307/1927792

Hardiatmo, B., & Daljono. (2013). Analisis Faktor-Faktor yang Mempengaruhi Kebijakan Dividen (Studi Empiris Perusahaan Manufaktur yang listing di Bursa Efek Indonesia Periode 2008-2010). Diponegoro Journal of Accounting, 2(1), 1–13.

Hellstrom, G., & Inagambaev, G. (2012). No Title Determinants of Dividend Payout Ratios (A Study of). Sweden : Umea School of Business and Economics.

Imran, K. (2011). Determinants of Dividend Payout Policy: A Case of Pakistan Engineering Sector. The Romanian Economic Journal, 14(41), 47–60.

Komalasari, P. T. (2016). Information Asymmetry and Herding Behavior. Jurnal Akuntansi Dan Keuangan Indonesia, 13(1), 70–85. https://doi.org/10.21002/jaki.2016.04

Krishnan, P., & Periasamy, M. N. (2022). Testing of Semi–Strong Form of Efficiency: An Empirical Study on Stock Market Reaction Around Dividend Announcemen. International Journal of Professional Business Review, 7(2), 1–18. https://doi.org/https://doi.org/10.26668/businessreview/2022.v7i2.0483

Li, M., & Roberts, H. (2023). Zero Leverage And Dividend Policy. Finance Research Letters, 58, 104–430. https://doi.org/10.1016/j.frl.2023.104430

Linden, A., Lehner, O. M., Losbichler, H., & Martikainen, M. (2023). Dividend Payout Decisions Under Uncertainty: The Ownership Influence In The Early Days Of The COVID-19 Pandemic In Finland. Journal of Applied Accounting Research, 24(2), 299–317. https://doi.org/10.1108/JAAR-10-2021-0274

Lintner, J. (1956). Distribution of Incomes of Corporations among Dividends, Retained Earnings and Taxes. American Economic Review, 46(2), 97–113. http://www.jstor.org/stable/1910664

Lintner, J. (1962). Dividends, Earnings, Leverage, Stock Prices, and the Supply of Capital to Corporations. Review of Economics and Statistics, 44(3), 243–269. https://doi.org/10.2307/1926397

Makka, K. (2014). Increasing Dividends by Industrial Firms on the JSE. University of the Witwatersrand.

Marietta, U., & Sampurno, D. (2013). Analisis Pengaruh Cash Ratio, Return On Assets, Growth, Firm Size, Debt to Equity Ratio Terhadap Dividend Payout Ratio : (Studi Pada Perusahaan Manufaktur Yang Terdaftar di Bursa Efek Indonesia Tahun 2008-2011). Diponegoro Journal Of Management, 2(3), 1–11.

Miller, M. H., & Modigliani, F. (1961). Dividend Policy, Growth, and the Valuation of Shares. The Journal of Business, 34(4), 411–433. https://www.jstor.org/stable/2351143

Mujilan, M. (2022). Stock Price Behaviour Around the Announcement Date of Cash Dividend on the Indonesia Stock Exchange. Jurnal Akuntansi Dan Keuangan, 24(1), 10–23. https://doi.org/10.9744/jak.24.1.10-23

Napitupulu, B. R. S., & Djajanti, A. (2021). The Factors Affecting Dividend Policy Of Manufacturing Companies In Indonesia Stock Exchange. Aplikasi Bisnis Dan Manajemen (JABM), 7(3), 592. https://doi.org/10.17358/jabm.7.3.592

Nazir, A., Azam, M., & Khalid, M. U. (2021). Debt financing and firm Performance: Empirical Evidence from the Pakistan Stock Exchange. Asian Journal of Accounting Research, 6(3), 324–334. https://doi.org/10.1108/AJAR-03-2019-0019

Nguyen, A. H., Pham, C. D., Doan, N. T., Ta, T. T., Nguyen, H. T., & Truong, T. V. (2021). The Effect of Dividend Payment on Firm’s Financial Performance: An Empirical Study of Vietnam. Journal Risk Financial Management, 14(8), 353. https://doi.org/https://doi.org/10.3390/jrfm14080353

Nyere, L., & Wesson, N. (2019). Factors Influencing Dividend Payout Decisions: Evidence from South Africa. South African Journal of Business Management, 50(1), 1–16. http://dx.doi.org/10.4102/sajbm.v50i1.1302

Sibanda, B. (2016). Drivers that Shape Corporate Payout Policy in South Africa. University of Pretoria’s Gordon Institute of Business Science (GIBS).

Sudarma, M., & Darmayasa, I. N. (2021). Historisitas Filosofis Konsep Pemajakan Dividen Pada Undang-Undang Cipta Kerja. Jurnal Akuntansi Multiparadigma, 12(2), 312–328. https://doi.org/10.21776/ub.jamal.2021.12.2.18

Suhadak, S., Kurniaty, K., Handayani, S. R., & Rahayu, S. M. (2019). Stock Return And Financial Performance As Moderation Variable In Influence Of Good Corporate Governance Towards Corporate Value. Asian Journal of Accounting Research, 4(1), 18–34. https://doi.org/10.1108/AJAR-07-2018-0021

Sujana, I. N. (2017). Pasar Modal yang Efisien. Ekuitas Jurnal Pendidikan Ekonomi, 5(2), 33–39. http://dx.doi.org/10.23887/ekuitas.v5i2.12753

Tinungki, T., Georgina, M., Robiyanto, R., & Powell, G. H. (2022). The Effect of COVID-19 Pandemic on Corporate Dividend Policy in Indonesia: The Static and Dynamic Panel Data Approaches. Economies, 10(1), 11. https://doi.org/10.3390/economies10010011

Trinh, Q. D., Haddad, H., & Tran, K. T. (2022). Financial Reporting Quality And Dividend Policy: New Evidence From An International Level. International Review of Financial Analysis, 80. https://doi.org/10.1016/j.irfa.2022.102026

Wahjudi, E. (2020). Factors Affecting Dividend Policy In Manufacturing Companies In Indonesia Stock Exchange. Journal of Management Development, 39(1), 4–17. https://doi.org/10.1108/JMD-07-2018-0211

Wernli, R., & Dietrich, A. (2022). Only the Brave: Improving Self-Rationing Efficiency among Discouraged Swiss SMEs. Small Business Economics, 59(3), 977–1003. https://doi.org/10.1007/s11187-021-00546-w

Widyawati, D., & Indriani, A. (2019). Determinants of dividend payout ratio: evidence from Indonesian manufacturing companies. Diponegoro International Journal of Business, 2(2), 112–121. http://dx.doi.org/10.14710/dijb.2.2.2019.112-121

Winarno, W. W. (2011). Analisis Ekonometrika dan Statistika dengan Eviews (Edisi Keti). Unit Penerbit dan Percetakan (UPP STIM YKPN).

Yeo, H. J. (2018). Role Of Free Cash Flows In Making Investment And Dividend Decisions: The Case Of The Shipping Industry. The Asian Journal of Shipping and Logistics, 34(2), 113–118. https://doi.org/10.1016/j.ajsl.2018.06.007