The Effect of Dividend Policy on the Market Value of the Jordanian Commercial and Islamic Banks Listed on the Amman Stock Exchange

Abstract

This study aims at examining the effect of Dividend Policy on the market value of Jordanian commercial and Islamic banks. The study population consists of all Jordanian banks listed on the Amman Stock Exchange during the period from 2008 – 2018. Data were collected from the annual reports of the sample banks. After the data collection, they were analyzed using descriptive analysis, correlation analysis, and multiple regression analysis. The results showed a statistically significant impact of dividend policy, this result indicates that there is an impact of the dividend policy on the market value of Jordanian commercial and Islamic banks listed on the ASE during the period 2008-2018. The results also showed a difference between the companies in terms of dividend policy followed, in addition, asymmetry in the Dividend Policy in banks during the study period. The study recommended a number of recommendations, including that manager of firms, should develop effective dividend payout policies to ensure that their firms pay out dividends to enhance the value of their companies and plan an efficient and reliable dividend policy, to suit the wishes of investors, and to engage stakeholders in a dialogue on dividend policy.