Determinants of Dividends Payout and Policy Used In Emerging Economies: Evidence from Turkey

Abstract

The study is focused on the determinants of dividends payout and policy in the emerging economies, as the sector is too significant and gets more attention from large number of researchers in financial area as well as accounting because of its contribution in the economy. The scope of the study went throughout 2005 to 2016 years, the selected time was theoretically analyzed and studied to understand determinant of dividends payout and policy used in emerging economies in comparison to countries with emerged economy. The study used Turkey to represent emerging economies since it is among the fast growing economy despite political and economic issues it goes through.

The study theoretically confirmed that size level, profitability size, retained earnings, net income, and debt level are the determinants of dividends payout and policy and are some of the significant factors. Additionally, through these factors we identified that emerging economies use unstable policies in comparison to developed economies. This study is too significant to investors since it will assist them to understand features of financial markets and companies listed or trading in those financial markets. Furthermore, the paper will assist financial managers to comprehend the significance of factors such as net income, cash balance, retained earnings and companies’ profitability in the process of dividend payments whilst maintaining stable financial position of the business.