Journal of Finance and Investment Analysis

The Determinants of Corporate Dividend Policy: Evidence from Palestine

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  • Abstract

    This paper aims at finding if there is any difference between the dividend policy implemented by listed companies in the Palestine market and those that are popularly documented in the literature. The data used for this study is collected from the Palestinian Stock Exchange for a period from 2008 to 2012 and from the interviews with Chief Financial Officers (CFOs) of the listed companies. The paper finds that profitability and firm size are positively significant to the dividend payout, while financial leverage and asset structure are negative to it. The views from CFOs mostly support this finding. We however do not find the impact of liquidity, free cash flows, growth opportunities and ownership on dividend payout as indicated in the literature. The CFOs also agree with most common dividend policy theories documented in the literature. We conclude that there is not much difference between the Palestinian market and other developed markets in terms of the approach to dividend policy and its determinants. Our research therefore adds to the literature with new evidence from the Palestine market.