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Dynamic Model of Dividend Payout Companies in Indonesia


Publication Date:

Authors : ; ; ;

Page : 183-192

Keywords : Dynamic Model; Targeted Dividend; Speed of Adjustment;

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This study attempts to test the dynamic dividend payout model on non-financial companies in Indonesia. Dynamic models have advantages compared to static models. The Dynamic models take into time account, while static models do not take into this account. The calculation of the time in the dynamic model is done by entering the lag variable. The dynamic model in this study includes dividend payout lag variables and eight other factors, they are profitability, firm size, investment ratio, asset structure, leverage, operating risk, corporate tax rates, and interest rates as the independent variables. Samples that collected were 192 non-financial companies listed in the Indonesia Stock Exchange in the 2011-2016 periods. The results of this study indicate that the variable lags in dividend payout, profitability, firm size, investment ratio, asset structure, corporate tax rate, and interest rate which have a positive effect on dividend payout, while leverage has a negative effect on dividend payout, while operating risk does not affect dividend payout. This study also shows that non-financial companies in Indonesia implement a stable dividend payout with a speed of adjustment to targeted dividends of 59,97% and a long-term target payout ratio of 69,54%. The speed of adjustment to targeted dividend low indicates that dividends do not increase in large numbers but gradually increase by considering the long-term targeted dividend payout ratio. Stability dividend will make the company have good performance in the capital market.

Last modified: 2021-08-03 17:37:31