The Impact Of Liquidity, Financial Leverage, And Company Size On Dividend Policy

(An Experimental Study On Banks Listed In Gulf Arab Markets)

Abstract

The aim of the research is to study the impact of liquidity, financial leverage, and firm size on dividend distribution policy by applying it to banks listed in the Gulf Arab markets. The research sample included markets in Saudi Arabia, Dubai, Abu Dhabi, Kuwait, Bahrain, and Qatar, and it consisted of 37 banks with 185 observations during the period from 2017 to 2021. The required data were obtained from the annual reports published in the financial statements of the banks under study. The data were analyzed using SPSS software. The research considered the dividend distribution policy as a dependent variable and measured it through dividends per share by dividing the dividends by the number of subscribed shares. Meanwhile, liquidity, financial leverage, and bank size were treated as independent variables. Liquidity was measured by dividing current assets by current liabilities, financial leverage by dividing total debt by total assets, and size by the natural logarithm of total assets.

The results showed the following:

• There is no statistically significant impact of liquidity, measured by dividing current assets by current liabilities, on the dividend distribution policy adopted by banks listed in the Gulf Arab markets.
• - There is no statistically significant impact of financial leverage, measured by dividing total debt by total assets, on the dividend distribution policy adopted by banks listed in the Gulf Arab markets.
• - There is a statistically significant impact of firm size, measured by the natural logarithm of total assets, on the dividend distribution policy adopted by banks listed in the Gulf Arab markets.