Dividend smoothing when firms distribute most of their earnings as dividends

K. H. Al-Yahyaee, T. M. Pham, T. S. Walter

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

Due to its distinctive institutional background, Oman offers a valuable opportunity to investigate the stability of the dividend policy. In Oman, (1) there are no taxes on dividends, (2) firms are highly levered mainly through bank loans, (3) there is a high concentration of stock ownership and (4) there is variability in cash dividend payments. These factors suggest a diminished role of dividend smoothing in Oman. Our results show that Omani financial firms have erratic dividend policies. These results are inconsistent with the predictions suggested by the relatively weak corporate governance, government ownership and dividend signalling.

Original languageEnglish
Pages (from-to)1175-1183
Number of pages9
JournalApplied Financial Economics
Volume21
Issue number16
DOIs
Publication statusPublished - Aug 2011

Fingerprint

Dividends
Dividend smoothing
Oman
Dividend policy
Payment
Dividend signalling
Tax
Prediction
Corporate governance
Cash dividends
Government ownership
Bank loans
Ownership
Factors

Keywords

  • Bank debt
  • Dividend smoothing
  • Government ownership
  • Taxes

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

Cite this

Dividend smoothing when firms distribute most of their earnings as dividends. / Al-Yahyaee, K. H.; Pham, T. M.; Walter, T. S.

In: Applied Financial Economics, Vol. 21, No. 16, 08.2011, p. 1175-1183.

Research output: Contribution to journalArticle

@article{8040f754a2bb41eead1a278225776d09,
title = "Dividend smoothing when firms distribute most of their earnings as dividends",
abstract = "Due to its distinctive institutional background, Oman offers a valuable opportunity to investigate the stability of the dividend policy. In Oman, (1) there are no taxes on dividends, (2) firms are highly levered mainly through bank loans, (3) there is a high concentration of stock ownership and (4) there is variability in cash dividend payments. These factors suggest a diminished role of dividend smoothing in Oman. Our results show that Omani financial firms have erratic dividend policies. These results are inconsistent with the predictions suggested by the relatively weak corporate governance, government ownership and dividend signalling.",
keywords = "Bank debt, Dividend smoothing, Government ownership, Taxes",
author = "Al-Yahyaee, {K. H.} and Pham, {T. M.} and Walter, {T. S.}",
year = "2011",
month = "8",
doi = "10.1080/09603107.2011.566177",
language = "English",
volume = "21",
pages = "1175--1183",
journal = "Applied Economics",
issn = "0003-6846",
publisher = "Routledge",
number = "16",

}

TY - JOUR

T1 - Dividend smoothing when firms distribute most of their earnings as dividends

AU - Al-Yahyaee, K. H.

AU - Pham, T. M.

AU - Walter, T. S.

PY - 2011/8

Y1 - 2011/8

N2 - Due to its distinctive institutional background, Oman offers a valuable opportunity to investigate the stability of the dividend policy. In Oman, (1) there are no taxes on dividends, (2) firms are highly levered mainly through bank loans, (3) there is a high concentration of stock ownership and (4) there is variability in cash dividend payments. These factors suggest a diminished role of dividend smoothing in Oman. Our results show that Omani financial firms have erratic dividend policies. These results are inconsistent with the predictions suggested by the relatively weak corporate governance, government ownership and dividend signalling.

AB - Due to its distinctive institutional background, Oman offers a valuable opportunity to investigate the stability of the dividend policy. In Oman, (1) there are no taxes on dividends, (2) firms are highly levered mainly through bank loans, (3) there is a high concentration of stock ownership and (4) there is variability in cash dividend payments. These factors suggest a diminished role of dividend smoothing in Oman. Our results show that Omani financial firms have erratic dividend policies. These results are inconsistent with the predictions suggested by the relatively weak corporate governance, government ownership and dividend signalling.

KW - Bank debt

KW - Dividend smoothing

KW - Government ownership

KW - Taxes

UR - http://www.scopus.com/inward/record.url?scp=79960885984&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=79960885984&partnerID=8YFLogxK

U2 - 10.1080/09603107.2011.566177

DO - 10.1080/09603107.2011.566177

M3 - Article

AN - SCOPUS:79960885984

VL - 21

SP - 1175

EP - 1183

JO - Applied Economics

JF - Applied Economics

SN - 0003-6846

IS - 16

ER -