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Dividend policy in the banking sector in G-7 and GCC countries: A comparative study

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journal contribution
posted on 15.02.2022, 16:32 by Hussam Hanifa, Mohammed Hamdan, Mohamed Haffar
Dividend policy has been a puzzling question for many years. This study attempts to identify the key factors affecting it in the financial sector that have been neglected in the literature. Using panel data on 621 Group of Seven (G-7) banks and 68 Gulf Cooperation Council (GCC) banks, five main factors namely, banks’ size, profitability, growth, leverage, and last year’s dividend were empirically tested regarding their impact on dividend payout ratios. In addition to comparing the two economies descriptively, the researchers employed panel data analysis using multiple regression with random effects. The findings revealed that the dividend payout ratio for the GCC countries is higher than G-7 countries in every year of the examined period (2010-2015). Furthermore, for both G-7 and GCC banks, profitability and last year dividend had a significant positive influence while banks’ leverage had a significant negative influence on the dividend payout. It was found also that banks’ size is an important dividend determinant in the G-7 countries only.

History

Published in

Risk Governance & Control: Financial Markets & Institutions

Publisher

Virtus Interpress

Version

VoR (Version of Record)

Citation

Hanifa, H., Hamdan, M., & Haffar, M. (2018) 'Dividend policy in the banking sector in G-7 and GCC countries: A comparative study', Risk Governance and Control: Financial Markets & Institutions, 8(3), 70-79. http://doi.org/10.22495/rgcv8i3p5

Print ISSN

2077-429X

Electronic ISSN

2077-4303

Cardiff Met Affiliation

  • Cardiff School of Management

Cardiff Met Authors

Mohammed Hamdan

Cardiff Met Research Centre/Group

  • Welsh Centre for Business and Management Research

Copyright Holder

© The Authors

Language

en