The Effect of Dividend Policy on Stock Return: A Case Study on Borsa Istanbul (BIST)

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TOPAK M. S., Dereli H.

International Conference on Applied Economics and Finance with Extended Social Sciences (ICOAEF-IV), Balıkesir, Turkey, 16 - 17 November 2019, pp.145, (Summary Text)

  • Publication Type: Conference Paper / Summary Text
  • City: Balıkesir
  • Country: Turkey
  • Page Numbers: pp.145
  • Open Archive Collection: AVESIS Open Access Collection
  • Istanbul University Affiliated: Yes

Abstract

The aim of this study is to investigate the effect of dividend policy on the stock return of Turkish firms. For this purpose, a balanced panel data set comprised of 111 firms listed on BIST, over the 2004 -2015 period, has been constructed. In this study, the dependent variable is the stock return and the independent variables chosen to represent the dividend policy are dividend payout ratio and dividend yield. The control variables which may affect the stock return are comprised of firm-specific variables (asset turnover ratio, leverage ratio, size, EBITDA margin) and macroeconomic indicators ( GDP growth rate, interest rate, exchange rate, and current account deficit ratio). The result of the analysis reveals that the effect of dividend policy on stock return is statistically insignificant. Moreover, it is found that macroeconomic indicators rather than firm-specific variables are effective in explaining stock return.