The Effect of Dividend Payment on Firm’s Financial Performance: An Empirical Study of Vietnam

Anh Huu Nguyen, Cuong Duc Pham, Nga Thanh Doan, Trang Thu Ta, Hieu Thanh Nguyen and Tu Van Truong
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Anh Huu Nguyen: School of Accounting and Auditing, The National Economics University, Hanoi 113068, Vietnam
Cuong Duc Pham: School of Accounting and Auditing, The National Economics University, Hanoi 113068, Vietnam
Nga Thanh Doan: School of Accounting and Auditing, The National Economics University, Hanoi 113068, Vietnam
Trang Thu Ta: School of Accounting and Auditing, The National Economics University, Hanoi 113068, Vietnam
Hieu Thanh Nguyen: School of Accounting and Auditing, The National Economics University, Hanoi 113068, Vietnam
Tu Van Truong: School of Accounting and Auditing, The National Economics University, Hanoi 113068, Vietnam

JRFM, 2021, vol. 14, issue 8, 1-11

Abstract: This research aims to investigate the effects of dividend policies on a firms’ financial performance. The paper explores the research gap and then builds a research model using ROA, ROE, and Tobin’s Q as dependent variables, dividend rate and decision of dividend payment as independent variables. The paper collected data and financial statements of 450 firms that are listing on the stock market of Vietnam from 2008 to 2019. The analysis results indicate that the decision of dividend payment has negative impact to Vietnamese firms measured by accounting-based performance but this improve market expectation on firms. In addition, the paper finds that Vietnamese firms are offering low dividend rate which has a positive impact on accounting-based performance but a negative effect on market expectation. This paper proposes some instructive recommendations based on the findings, including a more appropriate model of dividend policies, a lower dividend rate, and clear decision of dividend payment.

Keywords: dividend rate; decision of dividend payment; financial performance; Vietnam (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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