Country Influences on Corporate Dividend Policy

This paper investigates why firms in different countries have established different dividend policies using firm-level data from Australia, France, the U.K., and the U.S. Since the dividend payout ratio (DPR) usually lies between zero and one, the multiple logistic regression model for DPR is constructed on the basis of stylized dividend factors and new proxy variables on dividend policy. The results of the paper indicate that an explanation of different dividend policies across countries requires not only consideration of various dividend determinants but also their joint impacts. Firms in different countries have statistically different dividend policies, because each country has different country specific factors (i.e., managers attitudes, investors preferences, and economic conditions), institutional factors (i.e. tax system and corporate governance system), and firms financial structures (i.e. firm size, growth rate, and risk level). Further, each country has different dividend determinants and the impact of dividend determinants on its dividend policy varies across the sample countries.