Dividend Policy: An Empirical Analysis Of The Greek Market

Abstract

This paper explores the corporate dividend policy in the Greek market. Assuming that managers are reluctant to make dividend changes that might have to be reversed, we test the hypothesis that corporate dividends are associated with past dividends, as well as the performance and the effective management of the firms. The net income available to stockholders and the sales are employed as dummy variables that capture the performance and the effective management of the sampling firms respectively. The estimations have been performed using panel data procedure for a sample of 149 Greek companies listed in the Athens Stock Exchange during 1996 2001. The empirical results support the hypothesis that companies distribute a dividend according to their performance their effective management and are not willing to change their dividend policy frequently.