Determinants of dividend payout for selected service and manufacturing firms for the period covered 2006-2010

• Main Authors: Donato, Jovenoire D., Esguerra, Jean Clarizze A., Hipolito, Maria Louise C., Traboco, Lia S.
• Format: text
• Language: English
• Published: Animo Repository 2012
• Subjects: Manufacturing industries > Philippines; Service industries > Philippines; Dividends > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18340
• Institution: De La Salle University

Numerous empirical studies regarding dividend payout exist. Questions abound such as to whether or not dividend payout is relevant, as Modigliani and Miller's dividend irrelevance theory proposes, up to deciding what factors statistically affect dividend payout. Our research applied the study conducted by Gill, Biger & Tibrewala (2010) under the Philippine setting. We sought to determine whether or not our list of explanatory variables (profitability, cash flow, corporate tax, sales growth, market-to-book value and debt-to-equity ratio) statistically affect dividend payout. We also tested whether or not different industries have an effect towards dividend payout gathering data from two distinct industries, the service and manufacturing Industry. Finally, we also tested whether depreciation held any effect towards dividend payout by having two dependent variables, namely standard dividend payout and adjusted dividend payout. Implementing a fixed effects regression model, we found that profitability, cash flow, corporate tax and debt-to-equity ratio are statistically significant determinants of dividend payout. We also found that the effect of industry on dividend payout is negligible at best.