{"title":"Dividend policies and stock volatility-empirical evidence from Middle Eastern stock markets","authors":"A. Syed, H. Bawazir, Ibrahim Tawfeeq AlSidrah","doi":"10.1108/raf-03-2023-0069","DOIUrl":null,"url":null,"abstract":"\nPurpose\nThe study aims to explore the relation between dividend policy of any company and its stock volatility.\n\n\nDesign/methodology/approach\nCompanies listed on six GCC stock markets are used in the analysis and the data ranges from 2006 to 2020. Fixed effect and random effect panel data analysis is used to explore the association between stock volatility and the dividend policies.\n\n\nFindings\nA significant negative relation is observed between dividend payout and stock volatility. Also, significant negative relation between stock volatility and equity is found, whereas insignificant positive relation is observed between asset growth and stock volatility.\n\n\nResearch limitations/implications\nThe data of all listed companies on six GCC markets were not available.\n\n\nPractical implications\nThe question of raising dividend or maintaining at the current level is of utmost importance for the managers of any company before making any investment decisions. Also, the investors look at the dividend announcements as a sort of signal about the future prospect of the company. A stable or fluctuating dividends may be preferred by the investors that ultimately changes the stock price of any company.\n\n\nSocial implications\nThe relationship between dividend policy and the volatility of stock price is explored for emerging GCC markets which is the major significance of this paper which will have many social impacts on various stakeholders of any company including investors, regulators and employees, etc.\n\n\nOriginality/value\nTo the best of the authors’ knowledge, no study for GCC markets is done to establish a relation between stock volatility and the dividend policies which is needed by the academicians to further explore the behavior of these markets.\n","PeriodicalId":21152,"journal":{"name":"Review of Accounting and Finance","volume":null,"pages":null},"PeriodicalIF":3.6000,"publicationDate":"2023-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Review of Accounting and Finance","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/raf-03-2023-0069","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
Purpose
The study aims to explore the relation between dividend policy of any company and its stock volatility.
Design/methodology/approach
Companies listed on six GCC stock markets are used in the analysis and the data ranges from 2006 to 2020. Fixed effect and random effect panel data analysis is used to explore the association between stock volatility and the dividend policies.
Findings
A significant negative relation is observed between dividend payout and stock volatility. Also, significant negative relation between stock volatility and equity is found, whereas insignificant positive relation is observed between asset growth and stock volatility.
Research limitations/implications
The data of all listed companies on six GCC markets were not available.
Practical implications
The question of raising dividend or maintaining at the current level is of utmost importance for the managers of any company before making any investment decisions. Also, the investors look at the dividend announcements as a sort of signal about the future prospect of the company. A stable or fluctuating dividends may be preferred by the investors that ultimately changes the stock price of any company.
Social implications
The relationship between dividend policy and the volatility of stock price is explored for emerging GCC markets which is the major significance of this paper which will have many social impacts on various stakeholders of any company including investors, regulators and employees, etc.
Originality/value
To the best of the authors’ knowledge, no study for GCC markets is done to establish a relation between stock volatility and the dividend policies which is needed by the academicians to further explore the behavior of these markets.