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Dividend policy in the banking sector in G-7 and GCC countries: A comparative study
Hanifa, H. Hamdan, M. Haffar, Mohamed
Hanifa, H.
Hamdan, M.
Haffar, Mohamed
Publication Date
2018-11
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© 2018 The Authors. This work is licensed under the Creative
Commons Attribution-NonCommercial
4.0 International License (CC BY-NC 4.0).
http://creativecommons.org/licenses/by
-nc/4.0/
Peer-Reviewed
Yes
Open Access status
openAccess
Accepted for publication
26/10/2018
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Abstract
Dividend policy has been a puzzling question for many years. This
study attempts to identify the key factors affecting it in the
financial sector that have been neglected in the literature. Using
panel data on 621 Group of Seven (G-7) banks and 68 Gulf
Cooperation Council (GCC) banks, five main factors namely, banks’
size, profitability, growth, leverage, and last year’s dividend were
empirically tested regarding their impact on dividend payout
ratios. In addition to comparing the two economies descriptively,
the researchers employed panel data analysis using multiple
regression with random effects. The findings revealed that the
dividend payout ratio for the GCC countries is higher than G-7
countries in every year of the examined period (2010-2015).
Furthermore, for both G-7 and GCC banks, profitability and last
year dividend had a significant positive influence while banks’
leverage had a significant negative influence on the dividend
payout. It was found also that banks’ size is an important dividend
determinant in the G-7 countries only.
Version
Published version
Citation
Hanifa H, Hamdan M and Haffar M (2018) Dividend policy in the banking sector in G-7 and GCC countries: A comparative study. Risk Governance & Control: Financial Markets & Institutions. 8(3): 70-79.
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Article