DETERMINANTS OF DIVIDEND POLICY OF LISTED COMPANIES IN MARKET FOR ALTERNATIVE INVESTMENT (MAI) OF THAILAND

Abstract

Dividend is considered  as one of the primary financial  returns from investment  in common stocks oflisted companies. Therefore, this study aims to examine dividend policy and its determinants of 51 listed companies in Market for Alternative Investment (MAl) of Thailand during 2003 -2012   m order to shed more light on the dividend policy indicators which may be utilized in making investment decision. In this study, dividend policy of these listed companies is measured by two indicators. They are (1) dividend payout ratio and (2) dividend yield. In addition, fixed and random effects regression analyses are employed in this study.

The findings reveal that the average dividend payout ratio and dividend yield oflisted companies in MAl during the study period equal 57.01 and 5.85 percent, respectively. Furthermore, the findings also suggest that dividend policy of listed companies in MAl is determined by profitability, liquidity, cash flow from operation, size, sale growth and growth opportunity. In addition, profitability and sale growth have the negative impact on dividend payout ratio while liquidity has the positive effect on it. In terms of dividend yield,    the findings reveal that liquidity  and cash flow from operation have the positive effect on dividend yield whereas size, sale growth and growth opportunity have the negative effect on it.