The Relationship between Dividend Policy and Stock Price Volatility in the Tech Industry in France

Michel Martin ()

International Journal of Finance and Accounting, 2024, vol. 9, issue 3, 52 - 61

Abstract: Purpose: The aim of the study was to investigate the relationship between dividend policy and stock price volatility in the tech industry in France. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The relationship between dividend policy and stock price volatility in France's tech industry reveals that high dividend payouts may initially attract investors seeking income but can also increase stock price volatility. This volatility often arises from market reactions to dividend announcements and shifts in investor sentiment about company financial health and growth prospects. Effective management of dividend policies is crucial for tech firms to balance investor expectations with strategic growth initiatives while mitigating market risks. Unique Contribution to Theory, Practice and Policy: Agency theory, signaling theory & market timing theory may be used to anchor future studies on the relationship between dividend policy and stock price volatility in the tech industry in France. Developing dividend policies that balance the need for capital reinvestment in innovation with shareholder expectations for income stability. Tailoring regulatory frameworks to accommodate the unique dynamics of the tech industry, including its rapid growth and innovation cycles.

Keywords: Dividend Policy; Stock Price Volatility; Tech Industry (search for similar items in EconPapers)
Date: 2024
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