Impact of financial leverage on dividend payment behavior - Evidence from food producers sector in Ho Chi Minh stock exchange

Abstract

The study was conducted to examine the relationship between financial leverage and dividend payment pattern of listed firms in HOSE. The data was collected from 27 companies in Food producer sector over the period of 8 years from 2008 to 2015. Random effect model was used to run the regression analysis and came up with the conclusion of a negative relationship between leverage and dividend payment pattern of sampled firms. Additionally, level of earning also left a positive impact on dividend payment of a company, while firm’s size had no significant influence. The results of this study contribute to the corporate financing area, as it helped to decide an appropriate level of leverage and an optimal dividend policy.