Dividend policies and stock volatility-empirical evidence from Middle Eastern stock markets

Ali Murad Syed, Hana Saeed Bawazir and Ibrahim Tawfeeq AlSidrah

Review of Accounting and Finance, 2023, vol. 22, issue 5, 569-583

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.

Keywords: Dividends; Dividend yield; Volatility; Dividend payout; Assets; Stock price; Equity (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:rafpps:raf-03-2023-0069

DOI: 10.1108/RAF-03-2023-0069

Access Statistics for this article

Review of Accounting and Finance is currently edited by Nawazish Mirza

More articles in Review of Accounting and Finance from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().