The determinants of dividend policy: Evidence from the Greek market

Abstract

The main aim of this research is to examine dividend policy in the Greek market, as Greece has not been included to other empirical researches. This fact may be attributed to the peculiarity that Greek firms have to face, as they are obliged by the law to distribute to shareholders a minimum amount of dividends. For a sample of 46 companies, using data from 1998 to 2004 and with the implementation of panel data methodology, we find that retentions are more important than dividends in the determination of share prices. As to aspects that influence the dividend payout ratio of Greek firms, key factors are the current ratio, asset structure, size and ROE.