Abstract

This research aims at investigating the factors determining the dividend payout policy in the Lebanese banks listed on the Beirut Stock Exchange. This study considers the impact of seven variables, namely, profitability, liquidity, leverage, firm size, growth, firm risk and previous year’s dividend payout on the dividend payout ratios by using an unbalanced panel dataset of listed banks between the years of 2005 and 2011. Two models were tested using the OLS and the dynamic panel regressions. Empirical results show that the dividend payout policies are positively affected by the firm size, risk and previous year’s dividends, but are negatively affected by the opportunity growth and profitability. The results obtained might indicate that firms pay dividends with the intention of reducing the agency conflicts. Furthermore, managers take into consideration the stability of dividends while determining the dividend policy. Moreover, the results suggest that the Lebanese listed firms prefer to invest their earnings to grow rather than to pay more dividends.

 

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