The effects of firm specific variables on dividend decisions of Philippine listed firms from 2005 to 2007

Date of Publication

2007

Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Management of Financial Institutions

Subject Categories

Finance and Financial Management

College

Ramon V. Del Rosario College of Business

Department/Unit

Financial Management

Thesis Adviser

Junette Perez

Defense Panel Chair

Edralin Lim

Defense Panel Member



Steven Lim

Ruben Carlo Asuncion

Abstract/Summary

The relevance of dividend policies has been subject to debate for many years with inconclusive results. Miller and Modigliani have hypothesized the irrelevance of dividend policies given a perfect capital market however, the existence of an imperfect capital market closer approximates reality. Likewise, the Philippines has an imperfect capital market. We recognize that dividend polices are not irrelevant given the existence of an imperfect capital market. As such, there is a greater need to determine which factors influence corporate dividend decisions. Implementing the general-to-specific approach or model selection, we use the random effects probit estimation method to see whether firm size, profitability, degree of financial leverage, firm growth and investment opportunities, and agency cost variables have significant effects on the probability of issuing dividends. Our results show that the agency cost variable proxied by insider ownership has a positive relationship with the probability of issuing dividends. Similarly, firm size and profitability are also positive determinants of dividend decisions, while, in contrast the firm financial leverage has a negative effect on the Philippine corporate dividend decision.

Abstract Format

html

Language

English

Format

Print

Accession Number

TU21883

Shelf Location

Archives, The Learning Commons, 12F, Henry Sy Sr. Hall

Physical Description

79, 8 leaves ; illustrations ; 28 cm.

Keywords

Corporations--Finance; Dividends--Philippines

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