Retained Earnings and Dividends in Real Estate Sector in Egypt

Abstract

This study examines the trade-off between retained earnings (REs) and dividends in the Egyptian context to determine whether REs affect dividend policy and payout. Additionally, the study examines how the life cycle of a company influences the aforementioned relationships. The results of a multiple regression analysis indicate that REs are positively and significantly related to dividend policy and payout. However, when the company life cycle is introduced as a moderator, the results suggest a significantly negative relationship. Furthermore, a confirmatory test reveals that lagged REs influence dividend policy and payout. These findings carry significant implications for various stakeholders in Egypt. To the best of the knowledge of the authors, no study has investigated the causal relationship between REs and dividends in the Egyptian real estate context.