Effects of 2008 Financial Crisis on Dividend Payout Policies of Istanbul 100 Index Listed Companies

Hazal Tasci and Turhan Korkmaz
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Hazal Tasci: Akdeniz University
Turhan Korkmaz: Mersin University

Business and Economics Research Journal, 2018, vol. 9, issue 3, 605-618

Abstract: In this study, both the factors affecting the dividend policy and the effect of the financial crises on the dividend policy of the companies were examined based on the 2008 Crisis. For this purpose, the analysis period is divided into three parts as whole period; 2004-2016, pre-crisis period; 2004-2008 and post-crisis period; 2009-2016 and the analysis has been performed by exercising panel data method as using financial data of 43 firms listed in ISE 100 Index. Consequently, a positive relation has been detected among dividend payout ratio being a dependent variable, firm profitability, growth opportunities, retain earning/equity ratio and cash ratio. Contrary to expectations, a positive relationship was found between growth opportunities and dividend payout ratio. On the other hand, it is identified that the factors influencing dividend policy of the firms change and cash ratio increase substantially at crisis periods. Due to the current liquidity problem, many companies have reduced dividend payout ratios in 2009-2010, but continue to pay. This proves that the information content and signaling effect of the dividend is valid even in times of crisis.

Keywords: Dividend Policy; Financial Crisis; BIST 100; Panel Data; Signaling Theory (search for similar items in EconPapers)
JEL-codes: G10 G35 (search for similar items in EconPapers)
Date: 2018
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