Determinants of Corporate Dividends Policy: Evidence from an Emerging Economy

Abstract

The objective of this study is to establish the relationship between dividend policy and the attributes of non-financial companies listed on Abu Dhabi Securities Exchange (ADX). The companies comprise manufacturing, services, food staples, energy, telecommunications and property and real estate. To achieve this objective, panel data for the period between 2010 and 2012 were collected from the listed companies’ annual reports published on ADX website. The result of the analysis revealed that dividend policy is positively and significantly associated with corporate profitability, risk, free cash flows, size, majority shareholders and industry. Dividend policy, however, appeared to be negatively and significantly associated with corporate level of leverage. The result supports agency theory.