Determinants of dividend policy: A preliminary empirical analysis of the Greek firms

Abstract

Dividend policy is one of the most important financial policies, not only from the viewpoint of the company but also from the point of view of the shareholders. How do firms decide whether to pay dividends or not is an unsolved puzzle? There are a lot of theoretical and empirical studies that try to shed light to the rationale behind the dividend policy. This study is a preliminary empirical analysis of some of the determinants that influence the dividend policy in the Greek market during the period 1994 to 2004. Due to the fact that in Greece there are a few studies about the factors that affect the dividend behavior of the Greek corporations, with this preliminary paper I will attempt to fill the existing gap. Based on the current literature, I draw out some variables and I examined them in my model. Run regressions in order to investigate the relationship between the adjusted dividend and the expected earnings, the net income after taxes, the beta, the size, the sales, the sales growth, the return on equity and the total assets. Some of the results are consistent with the findings in the current literature, but there is still room for further investigation.