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Article
Publication date: 13 March 2019

N. Jayantha Dewasiri, Weerakoon Banda Yatiwelle Koralalage, Athambawa Abdul Azeez, P.G.S.A. Jayarathne, Duminda Kuruppuarachchi and V.A. Weerasinghe

The purpose of this paper is to identify the determinants of dividend policy in an emerging and developing market.

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Abstract

Purpose

The purpose of this paper is to identify the determinants of dividend policy in an emerging and developing market.

Design/methodology/approach

The study employs a quantitative approach using 191 Sri Lankan firms and 1,337 firm-year observations as the sample. The authors apply a Binary Logistic Regression model to uncover the determinants of the propensity to pay dividends, and a Fixed Effect Panel Regression to investigate the determinants of dividend payout.

Findings

The authors identify past dividend decision, earnings, investment opportunities, profitability, free cash flow (FCF), corporate governance, state ownership, firm size and industry influence as the key determinants of propensity to pay dividends. In addition past dividends, investment opportunities, profitability and dividend premium are identified as the determinants of dividend payout. Moreover, there is a feedback between dividend yield and profitability in one lag and between dividend yield and dividend premium in two lags, as short-term relationships. Hence, past dividend decision or payout, profitability and investment opportunities are a common set of determinants with implications for both propensity to pay dividends and its payout. The findings support theories of dividends such as signaling, outcome, catering, life cycle, FCF and pecking order.

Practical implications

The findings are important for investors, managers and future research. Investors should focus on the determinants identified by our study when making investment decisions whereas managers should practice the same when formulating appropriate dividend policies for their firms. Future research should rely on propensity to pay dividends and its payout simultaneously to promote a theoretical consensus on the dividend determinant puzzle.

Originality/value

This is the first study that investigates determinants of propensity to pay dividends and dividend payout along with short-term relationships in a single study.

Details

Managerial Finance, vol. 45 no. 3
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 14 August 2019

Nadeesha Abeysekara, Haijun Wang and Duminda Kuruppuarachchi

The purpose of this paper is to investigate the extent to which firms in the Sri Lankan apparel industry practice supply-chain-resilience (SCRes) capabilities and examine whether…

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Abstract

Purpose

The purpose of this paper is to investigate the extent to which firms in the Sri Lankan apparel industry practice supply-chain-resilience (SCRes) capabilities and examine whether SCRes practices affect the performance and competitive advantage of those firms.

Design/methodology/approach

Uses a conceptual framework to assess SCRes capabilities and to investigate their impact on firm performance and competitive advantage. Uses partial least squares structural equation modeling (PLS-SEM) to quantitatively analyze questionnaire data collected from 89 Sri Lankan apparel manufacturers.

Findings

In the presence of SCRes capabilities in the apparel industry, this study finds that supply-chain risk-management culture positively affects SCRes capabilities, namely re-engineering, agility and collaboration. Agility shows the greatest influence on firm performance and competitive advantage.

Research limitations/implications

This study is limited to the apparel industry sector (a manufacturing sector) in Sri Lanka to maintain the uniformity of the research constructs.

Practical implications

Results imply that management should pay more attention to enhancing SCRMC and prioritizing their SCRes capabilities.

Originality/value

This study is the first to assess SCRes capabilities in the apparel-manufacturing sector and examine the impact of SCRes capabilities on firm performance and competitive advantage.

Details

Business Process Management Journal, vol. 25 no. 7
Type: Research Article
ISSN: 1463-7154

Keywords

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