Moderating Role of Financial Market Development on The Relationship Between Stock Liquidity and Dividend

• Main Authors: Mohd Ashari Bakri, Bany-Ariffin Amin Nordin, Matemilola Bolaji Tunde, Lau Wei Theng
• Format: Article
• Language: English; English
• Published: Asian AcAsian Academy of Management and Penerbit Universiti Sains Malaysiaademy of Management and Penerbit Universiti Sains Malaysia 2020
• Subjects: HB Economic theory. Demography
• Online Access: https://eprints.ums.edu.my/id/eprint/26741/1/Moderating%20Role%20of%20Financial%20Market%20Development%20on%20The%20Relationship%20Between.pdf; https://eprints.ums.edu.my/id/eprint/26741/2/Moderating%20Role%20of%20Financial%20Market%20Development%20on%20The%20Relationship%20Between1.pdf; https://eprints.ums.edu.my/id/eprint/26741/; https://doi.org/10.21315/aamjaf2020.16.2.4
• Institution: Universiti Malaysia Sabah

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.