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Title: The propensity to pay dividends: empirical evidence from the MENA region

Authors: Panagiotis Andrikopoulos; Osama El-Ansary; Walid Ibrahim Hassan

Addresses: Centre for Financial and Corporate Integrity, Coventry University, Coventry, CV1 5DL, UK ' Faculty of Commerce, Cairo University, P.O. Box 249 Al-Orman, 12612, Giza, Egypt ' Faculty of Commerce, Cairo University, P.O. Box 249 Al-Orman, 12612, Giza, Egypt

Abstract: This paper investigates the relation between stock market sentiment and firms' propensity to pay dividends in the MENA region for the period 2000–2015. Using conventional determinants of cash distributions as control variables, our results show that the tendency to pay dividends is negatively related to the aggregate investors' sentiment but positively related to the dividend premium. Unlike prior literature, we report no association between firms' dividend policy and issues of stock market liquidity. Overall, we suggest that corporate payout policies in the case of the MENA region can best be explained by the dividend catering hypothesis.

Keywords: dividends; payout policy; sentiment index; market volatility.

DOI: 10.1504/IJBAAF.2020.104487

International Journal of Banking, Accounting and Finance, 2020 Vol.11 No.1, pp.136 - 171

Received: 17 Apr 2018
Accepted: 06 Jul 2018

Published online: 13 Jan 2020 *

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