Stock Liquidity, Financial Report Quality, Wedge, and The Propensity to Pay Dividend

• Main Authors: Rahmat Setiawan, Nova Christiana, Sanju Kumar Singh
• Format: Article PeerReviewed
• Language: English; Indonesian; English
• Published: Departemen Manajemen FEB Universitas Airlangga 2019
• Subjects: H Social Sciences; HG Finance; HG4551-4598 Stock exchanges
• Online Access: http://repository.unair.ac.id/101573/1/Rahmat%20Setiawan_Artikel10_Stock%20Liquidity.pdf; http://repository.unair.ac.id/101573/2/Rahmat%20Setiawan_Peer%20Review%20010.pdf; http://repository.unair.ac.id/101573/5/Rahmat%20Setiawan_Peer%20Review_Baru12_101573.pdf; http://repository.unair.ac.id/101573/; https://e-journal.unair.ac.id/JMTT/article/view/14915; http://dx.doi.org/10.20473/jmtt.v12i3.14915
• Institution: Universitas Airlangga

This research examined the effect of stock liquidity on the propensity to pay dividend for 254 Indonesian public listed firms during the period of l 2011 and 2015. Stock liquidity implies transparency level and serves as market monitor for management performance in using the cash flow. Furthermore, this research examines the impact of stock liquidity on dividend payment in the presence of agency conflicts using agency proxies, wedge and government ownership. This paper employed multivariate probit regression. The baseline model has controlled for time in-variant and industry sectors. Robustness checks are employed to present consistent result for other stock liquidity measures. The results confirm the predicted dividend model outcome and prove the contradiction in dividend signaling theory.