The impact of the dividend distribution policy on stock volatility
the moderating influence of ownership structure on Tunisian listed companies
DOI:
https://doi.org/10.59051/joaf.v15i2.844Keywords:
Dividend policy, Volatility of prices, Ownership structure, Tunisian companies, moderating effectAbstract
Purpose: This research analyses the impact of dividend distribution policy on the price volatility of the Tunisian companies as well as the moderating effect of the property structure on this relationship .
Methodology: To better understand these relationships, a multivaried analysis was carried out in panel data and this was done on the basis of 44 Tunisian companies' samples listed on the Tunisian stock exchange (B. V.M.T ) the period from 2008 to 2014 in accordance with our two hypotheses.
Results: We found that the dividend distribution policy is on the one hand significantly and negatively linked to the price volatility. On the other hand, the ownership structure has a moderating effect on the relationship between the dividend distribution policy and the price volatility.
Originality: It lies in the choice of the empirical validation of the Tunisian context which is in perpetual turbulence and the integration of the moderating effect of the ownership structure of the relationship between the dividend distribution policy and the prices volatility that have not been tackled in the previous research.
Downloads
References
Allen, F., A. Bernardo et I. Welch (2000), “A theory of dividends based on tax clientele,”Journal of Finance, 55(6),Pp 2499-2536. https://doi.: 10.1111/0022-1082.00298
Al-Malkawi, H. N. (2007), “Determinant of Corporate Dividend Policy in Jordan” ,Journal of Economic and Administrative Since 23, 44-71. http///doi: 10.1108/10264116200700007
Al-Najjar, B., &Kilincarslan, E. (2016). “The effect of ownership structure on dividendpolicy:
Amidu M. et Abor J. (2006)” Determinants of dividend payout ratios in Ghana”,The Journal of Risk Finance Vol 7 pp 136-145. http://doi.org/10.1108/15265940610648580
Anwar, S Singh S & Jain P K (2015) “cash dividend announcements and stock return volatility evidence from India” procedia economics and finance 30 pp 38-49 https://doi.org/10.1016/S2212-5671(15)01253-8
Baskin, J., (1989).”Dividend Policy and the Volatility of Common Stock”. The Journal of Portfolio Management 15(3),pp 19-25. https://doi.org/10.1016/S2212-5671(15)01253-8
Chen, C.R., Steiner, T.L (1999) Managerial ownership and agency conflicts: a non-linear simultaneous equation analysis of managerial ownership, risk taking, debt policy, and dividend policy. Finance. Rev. 34 (1), pp119–136. https://doi.org/10.1111/j.1540-6288.1999.tb00448.x
Chen, Z., Cheung, Y.L., Stouraitis, A. and Wong, A.W.S (2005). Ownership Concentration, Firm Performance, and Dividend Policy in Hong Kong, Pacific-Basin Finance Journal, vol 13 pp 431– 449https://doi.org/10.1016/j.pacfin.2004.12.001
Chen, Z., Du, J., Li, D et Ouyang, R. (2013), “Does foreign institutional ownership increase return volatility? Evidence from china”, Journal of Banking & Finance, vol. 37, no. 2, pp. 660-669. https://doi.org/10.1016/j.jbankfin.2012.10.006
Evidence from Turkey. Corporate Governance”, the International Journal of Business in Society, In Press. 16 (1)Pp 135-161http://doi.org/ 10.1108/CG-09-2015-0129
Fama, E., and K. French. 2001. Disappearing Dividends: Changing Firm Characteristics or Lower Propensity to Pay? Journal of Financial Economics vol 60, pp3–43 https://doi.org/10.1016/S0304-405X(01)00038-1
Farinha, J. (2003). “Dividend policy, corporate governance and the managerial entrenchment hypothesis: an empirical analysis”. Journal of Business Finance and Accounting, vol30,pp 1173-1209 http://doi.org/ 10.2139/ssrn.313976
Fida, A Khan S Ullah H (2012) The Impact of Ownership Structure on Dividend Policy Evidence from Emerging International Journal of Business and Social Science Vol 3 No 9 https://doi.org/10.1016/j.gfj.2018.06.002
Firth M , Gao J , Shen J, Zhang Y (2015) Institutional Stock Ownership and Firms’ Cash Dividend Policies: Evidence from China, Journal of Banking & Finance . https://doi.org/10.1016/j.jbankfin.2016.01.009
Frankfurter, G. M. and B. G. Wood (with J. Wansley) (2003) “Dividend Policy: Theory and Practice” Amsterdam: Elsevier Science BV https://doi.org/10.1016/B978-0-12-266051-1.X5000-X
Gordon, M. J (1959), “Dividends, Earnings, and Stock Prices” The Review of Economics and Statistics, Vol. 41, No. 2, Part 1 (May, 1959), pp. 99-105 https://doi.org/10.2307/1927792
Gordon, M. J (1963), “Optimal Investments and Financing Policy “ The Journal of Finance, Vol 18, No 2 pp 264-272. https://doi.org/10.1111/j.1540-6261.1963.tb00722.x
Grossman S et Hart, O (1982) «Corporate Financial Structure and Managerial Incentives." In J.McCall (ed.), The Economics of Information and Uncertainty. Chicago: University of ChicagoPress, 1982 URL: http://www.nber.org/chapters/c4434
Hafeez and Aitia (2010), “The ownership structure and dividend payout policy in Pakistan (Evidence from Karachi stock exchange 100 index)”. International Journal of business, management and Economics, Vol.1. No.1, pp. 58-69 https://doi.org/10.36924/sbe.2020.3304
Haq, M.A.U., Akram, K. and Ullah, M.I. (2015) “‘Stock price volatility and dividend policy inPakistan”, International Journal of Scientific and Research Publication, Vol. 5, No. 2, pp.1–10. le http:///www//doi : 10.29322
Hashemijoo, Mohammad and Hashemijoo, Mohammad and Mahdavi Ardekani, Aref and Younesi, Nejat, The Impact of Dividend Policy on Share Price Volatility in the Malaysian Stock Market (2012). Journal of Business Studies Quarterly, Vol. 4, No. 1, 2012, Available at SSRN: https://ssrn.com/abstract=2147458
Huang et al (2011) “Stock price volatility and overreaction in a political crisis: The effects of corporate governance and performance” Pacific-Basin Finance Journal 19 (2011) 1–20 https://doi.org/10.1016/j.pacfin.2010.08.001
Hussainey, K., Mgbame, C.O., Mgbame, A.M.C., (2011)”.Dividend Policy and Share Price Volatility: UK Evidence”. The Journal of Risk Finance 12(1), 57-68. https://doi.org/10.1108/15265941111100076
Jabbouri I (2016),“detreminants of corporate dividend policy in emerging markets evidence from MENA stock markets”research in international business and finance 37 pp 283 298 https://doi.org/10.1016/j.ribaf.2016.01.018
Jahfer, A et Mulafara, A.H (2016),” Dividend policy and share price volatility: evidence from Colombo stock market “Int. J. Managerial and Financial Accounting, Vol. 8, No. 2, 2016 http://doi.org/:10.1504/IJMFA.2016.077947
Jensen M (1986) “Agency costs of free-cash-flow, corporate finance, and takeovers”. American Economic. Revue., 76: 323-329. https://www.jstor.org/stable/1818789
Jensen, M. C. (1993), “The Modern Industrial Revolution, Exit, and the Failure of InternalControl Systems”, Journal of Finance, 48, 831-880. https://doi.org/10.1111/j.1540-6261.1993.tb04022.x
Jensen, Michael, and William Meckling, 1976, “Theory of the firm: Managerial behavior, agencycosts, and ownership structure”, Journal of Financial Economics 3, 305-360. https://doi.org/10.1016/0304-405X(76)90026-X
La Porta, R., Lopez-de-Silanes, F., Shleifer, A., Vishny, R.( 2000). Agency problems and dividend policies around the world. Journal of Finance 55, 133.https:// doi :10.2139/ssrn.52871
Lintner, J. (1956), “Distribution of Incomes of Corporations among Dividends, Retained Earnings and Taxes”, American Economic Review, Vol. 46, No. 2 http://www.jstor.org/stable/1910664
Litzenberger, R.H., Ramaswamy, K., (1982). “The Effects of Dividends on Common Stock Prices: Tax Effects of Information Effects”. The Journal of Finance 37 (2), 429-443. https://doi.org/10.1016/S2212-5671(15)01253-8
Louziri ,Reda Oubal , “Khadija. (2022) “Determinants of Dividend Policy: The Case of the Casablanca Stock Exchange” Journal of Risk and Financial Management 15(12):548 http://doi.org/ 10.3390/jrfm15120548 License CC BY 4.0.
Matar ,A ( 2024) “The Co-Movement between Emerging Stock Markets Using DCC-GARCH Model: Evidence from GCC and Amman Stock Exchange” Annals of Financial Economics 18(04) http://doi.org/10.1142/S2010495223500112 .
Modigliani, F., Miller, M.H (1963) “ Corporate income taxes and the cost of capital: a correction” American Economic Review 53, 433-443 http://doi.org/10.2139/ssrn.1715044
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Nidhal ZIADI ELLOUZ
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
