Impact of Political Uncertainties on the Dividend Policies of Nonfinancial Firms in Turkey

Foday Joof and Asil Azimli
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Asil Azimli: Cyprus International University

A chapter in New Dynamics in Banking and Finance, 2022, pp 73-84 from Springer

Abstract: Abstract This paper investigates the impact of political and economic policy uncertainties on the dividend policy of nonfinancial firms in Turkey. The study uses annual data from an unbalanced panel of 350 firms from 1998 to 2019. The results indicate that uncertainty related to economic and political policies negatively impacts cash dividends, implying that during the episodes of higher policy uncertainty, managers distribute lower dividends. A possible explanation is that uncertainty increases the cost of capital, which might cause unwillingness for firms to pay a dividend during these periods. Likewise, higher debt-to-equity ratio and capital expenditure were found to influence dividend payouts. These results are robust against the use of local and global measures of economic and political policy uncertainties.

Keywords: Political uncertainty; Dividend policies; Turkey (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-030-93725-6_4

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DOI: 10.1007/978-3-030-93725-6_4

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