This study aims to investigate the determinants of the dividends policy of the industrial firms listed in Amman Stock Exchange over the period (2003-2012). Principle component analysis is performed to extract the prominent factors that would affect the dividends policy from various variables and then the Logit regression is conducted to identify the major determinants of the dividend policy.Variables examined are represented by (profitability, firm size, financial leverage, liquidity, assets structure, growth opportunities, business risk, firm age, ownership concentration and board of directors Size). The dependent variable is (dividend policy) which has been measured as a dummy variable with the value (1) if the company paid dividend, and (0) if it did not. The study used time series-cross-sectional data analysis (panel data analysis) for 52 industrial Jordanian companies.The results of the study show that on average the Jordanian industrial company’s distribute approximately 53% of their profits as dividends. The study also finds that there is a statistically significant positive effect for each of the (company's profitability, age, and size of the board of directors) on the dividend policy in the Jordanian industrial firms during the study period. Moreover, it finds a statistically significant negative relationship between (business risk, assets structure, and financial leverage) and dividend policy. Logit regression analysis shows that profitability, business risk and financial leverage are the major determinants of the dividend policy for Jordanian industrial companies.
Alrabadi, Dima Waleed Dr and Abu zeyadeh, Laila Omar Dr
"Principle Component Analysis and Dividends Policy:The Case of Amman Stock Exchange,"
Arab Journal of Administration المجلة العربية للإدارة: Vol. 36
, Article 9.
Available at: https://digitalcommons.aaru.edu.jo/aja/vol36/iss1/9