Elements Influencing Dividends of Banks in the MENA Region

Abstract

Dividend Policy is crucial for every banking organization, since it aids in finding the market worth of the organization's capital, and it helps shareholders arrange their investment plans. By exploiting a sample data collected from 40 different banks across 8 different countries in the MENA region; covering a period of 7 years from 2011 till 2017; the study identifies, via regression analysis, the impact of financial leverage, investment expenditure, total assets, liquidity, capital adequacy, return on assets, and GDP on dividends. Dividend payout ratio and Ln dividends been used as dependent variables. The results show an insignificant model using dividend payout ratio as a dependent variable, since it has a high prob. F stat. of 74.64%. While it shows a significant model using ln dividend as a dependent variable with a prob. F stat. of 0.000, R-Squared value of 96.97%. The size of the bank shows a significant positive effect on dividends paid, while other variables found to have insignificant impact.

Keywords: Banks, MENA, Dividends, Capital, Size, Assets, Investment, GDP, liquidity, financial leverage.

DOI: 10.7176/RJFA/10-12-09

Publication date:June 30^th 2019