The effect of dividend policy on firm performance: Evidence from Vietnamese stock market

Abstract

Dividend policy is one of the important decisions in corporate finance and it also has been a controversial issue among economists and researchers regarding a great number of different findings along with theories related. Using the regression model run in panel data, this study investigate how dividend policy affects firm performance on Vietnamese stock market. In particular, the study emphasizes on the influence of three dividend-related factors, namely dividend pay-out ratio, dividend change and dividend stability on firm profitability (return on asset, return on equity). Even though being in line with dividend relevance theory of John Lintner, this study surprisingly contributes to the ongoing argument by the total contrary findings with information content of dividend

in which lower dividend pay-out ratio pursues a higher current firm performance.