Testing Dividend Signaling Theory in Turkey as an Emerging Market: Empirical Evidence From Public Firms Listed in Borsa Istanbul
Küçük Resim Yok
Tarih
2021
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Erişim Hakkı
info:eu-repo/semantics/openAccess
Özet
Dividends (profit share) and profitability (financial performance) still remain unarguably among the most salient attributes of financial research. This paper is interested in empirically exploring if and how signalization theory works in general while being interested in also exploring to what extent dividends may account for the corporate profitability being corporate financial performance in particular. Dynamic panel regressions are performed to test our predictions on twelve (12) different models for an emerging market economy with a sampling time window spanning 2000 through 2018 for 45 listed companies. Financial firms (FFs) versus Non-Financial firms (NFFs) are examined separately and compared together. Although results usually document that (present) dividends tend to be irrelevant in accounting for (signalling future) corporate profitability. However, we have found evidence that dividends, for NFFs, were documented to be relevant in explaining future corporate profitability when the regressed variable is proxied as Return on Capital which may be captured as Earnings Before Tax/Paid-in Capital. In particular, the relationship between present corporate dividend distribution and future corporate profitability is positive, suggesting the higher (lower) the dividends the higher (lower) the profitability. In addition, of all the models tested, for a sizeable fraction, we have also found significant linkage between the lagged and the leadership values of the dependent variable being corporate profitability or corporate financial performance, either for FFs or NFFs if not both.
Açıklama
Anahtar Kelimeler
Kaynak
Muhasebe ve Finansman Dergisi
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0
Sayı
Özel Sayı-Ağustos 2021
