Authors : Augustina Kurniasih, Hermanto Siregar, Roy Sembel and Noer Azam Achsani
Abstract: Dividend payments allegedly influenced by internal and external factors. There were numerous research concerning the determinant of dividend in the developed markets but there was only a little in the emerging markets. Using panel data analysis, this study aims to find factors that affect the payment of dividends in Indonesia, one of the most dynamic emerging markets in the world. The results showed that internal factors affecting the payment of dividends are the policy of financing (debt to equity ratio and earnings per share), operating policies (sales growth, firm size, return on assets, gross profit margins and liquidity), agency problems (free cash flow and ownership share) and the risks facing the company. Furthermore, inflation as one of the external factors also affects dividend payments. On the other hand, growth of assets as a proxy for the investment policy was no significant impact on the dividend payment.
Augustina Kurniasih, Hermanto Siregar, Roy Sembel and Noer Azam Achsani, 2014. The Determinant of Dividend Payout Policy in the Emerging Market of Indonesia: Internal Versus External Factors. Research Journal of Applied Sciences, 9: 382-388.