Testing Effects of Changes in Earnings to Dividend Actions of Listed Firms on Vietnamese Stock Exchanges Using the Multinomial Logistic Regression Model
Nguyen, V. D., Nguyen, T. H. Y. (2018). Testing Effects of Changes in
Earnings to Dividend Actions of Listed Firms on Vietnamese Stock
Exchanges Using the Multinomial Logistic Regression Model. VNU Journal
of Science: Economics and Business, Vol. 34, No. 2 (2018) 44-53
http://repository.vnu.edu.vn/handle/VNU_123/62549?mode=full
This paper aims to fill the gap in dividend policy research of listed companies in Vietnam. Effects of changes in earnings to changes in dividend actions of selected listed firms are tested in order to figure out their relationships. The multinomial logistic regression model is employed with the data from a balanced panel of 310 listed firms on Vietnamese Stock Exchanges during the period 2008-2016. The study has estimated odds and odds ratios of four dividend change cases in response to each of three cases of earnings changes. The results show that the dividend actions of firms are very sensitive to earnings changes. When earnings decrease, the odds that firms remain dividend action higher than odds that increase dividend, lower than odds that decrease dividend. When earnings negative, the odds that firms remain dividend action lower than odds that firms move to zero dividend. In addition, in 26% of the cases there was no change to dividends when earnings increased and in 27% no change when earnings decreased. The results are supportive of the hypothesis that dividend actions are strongly affected by firms’ earnings and past dividend actions. The research results are meaningful to dividend income investors in formulating their investment strategies and for management of firms in designing firms’ dividend policies.
http://repository.vnu.edu.vn/handle/VNU_123/62549?mode=full
This paper aims to fill the gap in dividend policy research of listed companies in Vietnam. Effects of changes in earnings to changes in dividend actions of selected listed firms are tested in order to figure out their relationships. The multinomial logistic regression model is employed with the data from a balanced panel of 310 listed firms on Vietnamese Stock Exchanges during the period 2008-2016. The study has estimated odds and odds ratios of four dividend change cases in response to each of three cases of earnings changes. The results show that the dividend actions of firms are very sensitive to earnings changes. When earnings decrease, the odds that firms remain dividend action higher than odds that increase dividend, lower than odds that decrease dividend. When earnings negative, the odds that firms remain dividend action lower than odds that firms move to zero dividend. In addition, in 26% of the cases there was no change to dividends when earnings increased and in 27% no change when earnings decreased. The results are supportive of the hypothesis that dividend actions are strongly affected by firms’ earnings and past dividend actions. The research results are meaningful to dividend income investors in formulating their investment strategies and for management of firms in designing firms’ dividend policies.
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