Moderating Role of Financial Market Development on the Relationship between Stock Liquidity and Dividend

Mohd Ashari Bakri (), Bany-Ariffin Amin Nordin, Bolaji Tunde Matemilola and Lau Wei Theng
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Mohd Ashari Bakri: Labuan Faculty of International Finance, Universiti Malaysia Sabah, Labuan International Campus, Jalan Sungai Pagar, 87000 Federal Territory of Labuan, Malaysia
Bany-Ariffin Amin Nordin: Department of Accounting and Finance, Universiti Putra Malaysia, 43400 Serdang, Selangor, Malaysia
Bolaji Tunde Matemilola: Department of Accounting and Finance, Universiti Putra Malaysia, 43400 Serdang, Selangor, Malaysia
Lau Wei Theng: Department of Accounting and Finance, Universiti Putra Malaysia, 43400 Serdang, Selangor, Malaysia

Asian Academy of Management Journal of Accounting and Finance (AAMJAF), 2020, vol. 16, issue 2, 77-99

Abstract: This article aims to investigate the relationship between stock liquidity and dividend across emerging market countries as well as examined the moderating role of financial market development on the relationship between stock liquidity and dividend. Data were obtained from the World Bank and DataStream databases. The study examined 3,258 listed firms from 22 emerging markets to be extrapolated in the emerging market context. To analyse the data, this article used the panel data Tobit model and panel logistic regression, both with random effects. The analysis revealed that financial market development has a positive moderating effect on the relationship between stock liquidity and dividend by improving local market liquidity and mitigating information asymmetry. The study findings provide information for managers to devise investment strategy in the emerging markets. This article provides new insights into the financial market development moderating role on the relationship between stock liquidity and dividend.

Keywords: financial market development; stock liquidity; dividend; information; asymmetry; emerging market (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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