Are Dividends Disappearing or Shrinking? Evidence from the Istanbul Stock Exchange

KIRKULAK ULUDAĞ B., KURT GÜMÜŞ G.

EMERGING MARKETS FINANCE AND TRADE, cilt.46, sa.2, ss.38-52, 2010 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 46 Sayı: 2
  • Basım Tarihi: 2010
  • Doi Numarası: 10.2753/ree1540-496x460203
  • Dergi Adı: EMERGING MARKETS FINANCE AND TRADE
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus
  • Sayfa Sayıları: ss.38-52
  • Anahtar Kelimeler: dividend concentration, dividend reductions and omissions, FINANCIAL DISTRESS, POLICY, INFORMATION, EARNINGS, OMISSIONS, GROWTH, FIRMS, PAY
  • Dokuz Eylül Üniversitesi Adresli: Evet

Özet

This paper examines the dividend payment decision of publicly owned firms listed on the Istanbul Stock Exchange (ISE) from 1991 through 2006. There is a decline in the percentage of net dividend payers, accompanied by a decline in the aggregate level of net real dividends paid. Contrary to the situation in developed markets, earnings and dividends concentration have declined over the sample period. The first mandatory dividend payment regulation pushed some firms to collect the distributed dividends back through rights issues and this resulted in low net dividend payments. One of the striking findings of this paper reveals that a majority of ISE firms prefer dividend omissions rather than dividend reductions. Once a firm keeps paying dividends, it puts much effort into increasing dividend payments rather than reducing them. Further, dividend payment and reduction decisions are affected by the current earnings of the firm and financial crisis significantly explains both the dividend payment and dividend reduction decisions.