Volume 16 Issue 2 2020


Mubashir Ali Khan
Bahria University Karachi Campus.

Fareeha Abbasi
Bahria University Karachi Campus.

Muhammad Azeem Ahmad
Barani Institute of Sciences.

Imran Arshad
Salim Habib University, Karachi.

Abstract This study is aimed at finding the key determinants of consistent dividend-paying non-financial firms of Pakistan. The study uses data of non-financial firms of Pakistan that are listed at the Pakistan Stock Exchange. The secondary data is collected for 91 non-financial firms from their annual reports from 2012 to 2018. Hypotheses have been tested using the fixed effects regression technique which was confirmed through the Hausman specification test. OLS pooled regression was applied to investigate the impact of the ROA, financial leverage, corporate tax, and firm size on the dividend payout ratio. The result of the study is as follows: DPR was found to have a positive significant relationship with financial leverage, corporate tax, and firm size whereas its association with profitability was found to be insignificant. There were few limitations to the current study; the foremost among them were resource and time constraints that somehow restricted the entire research to narrow down the scope and domain. At the same time, comparatively smaller sample size and consideration to specific non-financial sectors restrained its generalizability to a larger proportion and applicability as well. Corporate managers should be more inclined towards retaining earnings in times of high taxes than paying out dividends making the financial health of the firm their utmost priority. The firms should focus on the efficient use of their resources to improve performance as well as their ability to pay dividends without getting buried under debts. In the non-financial sector, most firms do not pay regular dividends. Firms should follow stable dividend policies to attract foreign and local potential investors.
Keywords Dividend Payout Ratio, Non-Financial firms, Panel Data Analysis.
Year 2020
Volume 16
Issue 2
Type Research paper, manuscript, article
Recognized by Higher Education Commission of Pakistan, HEC
Category "Y"
Journal Name IBT Journal of Business Studies
Publisher Name ILMA University
Jel Classification E02, E44, E71, E41, E45, F62, J11
DOI http://dx.doi.org/10.46745/ilma.jbs.2020.16.02.07
ISSN no (E, Electronic) 2409-6520
ISSN no (P, Print) 2414-8393
Country Pakistan
City Karachi
Institution Type University
Journal Type Open Access
Type of Review Double Blind Peer Reviewed
Format PDF
Paper Link http://ibtjbs.ilmauniversity.edu.pk/journal/jbs/16.2/7.pdf
Page 103-121
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