Year: 2016
Type: article
Abstract: Despite years of empirical research, the linkage between dividend policy and stock price volatility (SPV) remains controversial among the researchers and scholars. This research endeavors to figure out the relationship between SPV and dividend policy of listed companies in Pakistan. A sample of 50 firms, based upon consistent dividend paying behavior, listed on Karachi Stock Exchange (KSE) has been selected from non-financial sectors, for the period of 2005-2012. Multiple regressions analyses have been carried on by applying random effect model on panel data i.e., for empirical estimation and robustness, panel estimated generalized least squares methods is used for finding relationship between dividend policy (dividend payout [DP] and dividend yield [DY]) and SPV after controlling for firm size (FS), asset growth (AG), long-term debt (LD), earning volatility (EV) and earnings per share (EPS). The study has found significant negative relationship between SPV and dividend policy variables i.e., DP and DY. Study has also found significant positive relationship between control variables (AG, EV and EPS) and SPV in KSE. But in case of the remaining two control variables i.e., FS and LD, these were found to be negatively related to SPV. The findings of this research are expected to contribute to dividend policy literature by providing evidence from Pakistani stock market to prior studies done in developed and developing countries
Authors: Syed Akif Shah, Umara Noreen
Institution: Prince Sultan University
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $300
OpenAlex ID: W2339933639