Title: Dividend policy and the bank-firm relationship: evidence from Tunisian context

Authors: Khaoula Aliani; Lama Al-Kayed; Marwa Gouasmia

Addresses: Business Administration Department, College of Business Administration, Princess Nourah Bint Abdulrahman University, Riyadh, 11564, Saudi Arabia ' Finance Department, College of Business Administration, Prince Sultan University, Riyadh, 11564, Saudi Arabia ' Higher İnstitute of Business Administration, University of Gafsa, Gafsa, 2100, Tunisia

Abstract: The Tunisian economy has undergone several changes since independence, such as liberalisation and the opening of the external market. Since then, the financial market has developed gradually. These changes have positively affected banking services and the reforms of the International Monetary Fund (1986-1997) have significantly improved the Tunisian banking sector. This paper aims to study the dividend policy of Tunisian firms, focusing on the relationship between banks and firms, and its impact on the dividend policy (DP) of non-financial firms. Two econometric models have been used to explore the role of banks in Tunisian firms: partial adjustment model (PAM) and fully adjustment model (FAM). The results of both models suggest that the creditor bank positively affects the DP of non-financial firms in Tunisia. Only the results of PAM model have shown that banks play a dual role in nonfinancial Tunisian firms and negatively affect the payment of dividends.

Keywords: dividend policy; banks; PAM model; FAM model; Tunisian firms; BFR; bank-firm relationship; GMM; generalised method of moments.

DOI: 10.1504/IJMEF.2020.10031709

International Journal of Monetary Economics and Finance, 2020 Vol.13 No.5, pp.485 - 501

Received: 28 Jan 2020
Accepted: 13 May 2020

Published online: 14 Oct 2020 *

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