The Role of Collateralizable Asset, Profitability and Operating Cash Flow on Dividend Policy: A Study on ASEAN Non-Financial Companies
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Collateralizable asset , Profitability, Cash Flow Operating, Dividend policy
Abstract
This study aims to investigate the influence of collateralizable assets, profitability, and operating cash flow on dividend policy among non-financial companies in the ASEAN region. Understanding these relationships can provide valuable insights for both investors and corporate management regarding the factors that drive dividend distribution decisions. The study utilizes a panel data set of ASEAN non-financial companies obtained from the OSIRIS database, which compiles data from various stock exchanges in the region. The analysis was conducted using statistical methods to evaluate the impact of the selected variables on dividend policy, with profitability measured by return on assets (ROA) and operating cash flow considered as key indicators. The results reveal that profitability and operating cash flow significantly influence dividend policy. Profitability, as indicated by ROA, has a positive effect on dividend policy, suggesting that companies with higher profitability are more likely to distribute dividends. Conversely, operating cash flow was found to have a significant negative impact on dividend policy. Interestingly, collateralizable assets were found to have no significant effect on dividend policy. The study concludes that profitability is a critical factor in determining dividend policy, while operating cash flow also plays a significant role, albeit negatively. Collateralizable assets do not appear to influence dividend decisions. These findings highlight the importance of maintaining strong profitability to support favourable dividend policies. The implications of this study suggest that corporate management should focus on enhancing profitability to sustain or increase dividend payments. Additionally, companies should be mindful of how operating cash flow is managed, as its negative impact on dividend policy could influence investor perceptions and decisions. Future research could further explore these relationships by including more recent data and examining additional variables that may affect dividend policy.
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