(Luận văn thạc sĩ) factors affecting the dividend payment decision of the listed companies on the stock market of vietnam

756 | ICUEH2017 Factors affecting the dividend payment decision of the listed companies on the stock market of Vietnam NGUYEN HOANG GIANG University of Labour & Social Affairs HCMC – giangnguyenldxh@gmail.com PHAM THI THANH HUYEN University of Labour & Social Affairs HCMC – huyenphamldxh@gmail.com Abstract The research was undertaken to further empirical answer to the question: Which factors influence dividend payment decision of the listed companies on the stock market of Vietnam, and the impact of them? The author has collected data of 187 companies listed on the Stock Exchange HOSE and HNX, analyse the panel data by to ordinary least square (Pooled OLS) model multiple regressions to examine the relationship between the dividend factors include profit, growth rates, financial leverage, company size, structure assets, cash flow and the type of auditing company The results showed that: profit, financial leverage, company size, structure assets, and cash flow are the factors that decision to pay dividends of listed companies in Vietnamese stock market Keywords: company listed; dividends; stock market Introduction Dividend policy is one of three important decisions in corporate finance So far, there are no general answers about the factors determining dividend policy, due to national peculiarities and different market characteristics that dividend policy influenced by different factors As Fisher Black (1976) said, "look at the dividend picture, the more it seems like a puzzle, with pieces that just don’t fit together” When a shareholder capital contribution to the business, there are two benefits that they aimed, first is to obtain capital gains through an increase in the prices of shares, the second dividend earned through the company distributed to the shareholders from the Nguyen Hoang Giang & Pham Thi Thanh Huyen | 757 profits of the company Indeed, when the stock market developed at a high level and have good liquidity, the investors seem less concerned than dividends But when the stock market decline, the dividend policy of the company emerged as one of the issues that are being focused investors The proposed research model and research hypotheses Based on the research model of Authors Al Shabibi and G Ramesh (2011) also refer to how to define variables in the research paper's Authors Gill et al (2010), Zanjirdar and Seifi (2012), Javid Ahmed and Medicine (2009) Multivariate regression models were set as follows: DPS = b0 + b1EPS + b2GROW + b3LEV + b4SIZE + b5TANG + b6OCF + b7AUDIT + e Where Through the above model, identifying the variables included in the assumptions are described as follows: The dependent variable: - Dividends in cash per share (DPS) is determined by dividing total cash dividend divided number of common shares The independent variables: - Net profit of the company (EPS) is measured by dividing the net income of ordinary shareholders divided by the number of common shares Dividends are paid based on earnings generated by the business This is also the legal requirements of the countries in the world in terms of dividends So profitable will be the source to make the dividend distribution of high or low Based on the above conclusions, the hypothesis is stated as follows: H1: There is the positive correlation of profits and dividend payment rate - The rate of growth (GROW) was determined by taking the difference in revenue in t to the year t-1 compared to the revenues in t-1 Companies tend to use internal funds to finance their investment projects Thus, the company has great growth opportunities and investment projects in large companies will 758 | ICUEH2017 cut dividend payments or less to limit dependence on external financing expensive Based on the above conclusions, the hypothesis is stated as follows: H2: There is a negative correlation between the growth rate and level of dividend payments - Financial leverage (LEV) said that a company is financed from external funds is how much, defined as the ratio of total debt to total assets (the total debt over the total liabilities and owners’ equity) Cost theory represents that the payment of dividends and capital structure may limit the problems related to asymmetric information Dividends and debt are seen as a measure of free cash flow fell under the control of the management, and help reduces agency costs From the argument just mentioned, the hypothesis outlined as follows: H3: There is a negative correlation between financial leverage and the level of dividend payments - Company size (SIZE) is determined by taking the logarithm of the total asset Company size is an important variable to explain the payment of dividends of companies Ho (2003) and Aivazian et al (2003) suggested that big companies have access to capital markets easily, so less restricted financially, which leads to big companies pay more dividends than smaller companies Additionally, the big companies distribute dividends are to reduces the cost of many representatives Based on these arguments and empirical evidence mentioned above, the hypothesis is stated as follows: H4: There is a positive correlation between company size and level of dividend payments - The structure of assets (TANG): To be determined by taking the fixed assets tangible divided by the total asset Property structure here is considered the ratio of tangible fixed assets in the total assets of the company The company has many tangibles fixed assets, the benefit of the tax shield without relying on debt, so they will use the dividend policy to influence the information asymmetry and agency costs Therefore, there is a positive correlation between the relationship of dividend and asset structure (Korch and Sheoy, 1999) Nguyen Hoang Giang & Pham Thi Thanh Huyen | 759 The studies have different conclusions about the direct correlation between asset structure and dividend policy So can’t give a specific forecast for the afternoon impact, the hypothesis of this study given as follows: H5: There is a correlation between the structure of assets and the dividend payment - Cash flow (OCF): Defined as operating cash flow above net cash flows from operating activities in the cash flow statement The company's cash flow is an important factor in deciding to pay dividends When a company has a poor liquidity situation, it will lead to fewer dividend payments due to the shortage of cash Alli et al (1993) suggested that the payment of the dividend depends on the cash flow, cash flow affect the ability to pay dividends of the company is stronger than current profits According to research by Amidu and Abor (2006), Anil Kapoor and (2008) there is a positive correlation between cash flow and pay dividends Based on the study above, the hypothesis outlined as follows: H6: There is a positive correlation between cash flow and pay dividends - Type company audit (AUDIT): Classification auditing company to review the financial statements of the company have been audited by one of the big4 or not, and it affects the level of the dividend payment is Currently, the big4 has operated in Vietnam Based on the study above, can be predicted that there is a positive correlation between the type of auditing company and the dividend payment Hence, the hypothesis outlined as follows: H7: There is a positive correlation between the type of auditing company and the dividend payment Research Methodology The author uses quantitative research methods The data is used to study the secondary data, collected from reports published by companies listed on the Stock Exchange HOSE and HNX Using statistical software SPSS to analyse regression "panel data" by “ordinary least square”, in order to discover the relationship between the level of dividend payments and the endogenous factors of the companies are putting research on the model 760 | ICUEH2017 Research result * Describe data sources and sample data collected from the following sources: If the company is listed on HOSE is based on financial statements posted on the websites of HOSE, for companies listed on the HNX, was based on the financial statements are posted on the site VietStock The author selected 90 companies listed on HOSE and 97 companies listed on the HNX for inclusion in the study sample Thus, a sample of 187 non-financial companies with the sampling period from: 2008 to 2011 - stage after the Vietnam stock market was established nearly 10 years The sample included 187 companies and the sampling period is years, it will have 748 observers However, there are a number of companies with data dividend per share (DPS), the author will remove the dividend observed that missing out samples After removing 49 observations missing data on dividend out of the sample, this time with 699 sample of observations SPSS Statistics 20 software will be used to detect the relationship between the dependent variable is the dividend and the independent variables in the model yet studied * Statistic description To provide a vision overview of the value of the variable through the data of 699 observations were collected on two Stock Exchange is a HOSE and HNX in the period from 2008 to 2011, and is a tool for overall assessment of the dependent variable is the dividend and independent variables used to study through the target minimum value, maximum value, average value, and the standard deviation Table descriptive statistics are given as follows: Table Statistics describes the variables used in the study N Minimum Maximum Mean Std Deviation DPS 699 300 9500 1742,59 984,066 EPS 699 32 25563 4000,63 2922,759 GROW 699 -0,661 2,715 0,23237 0,335305 Nguyen Hoang Giang & Pham Thi Thanh Huyen | 761 N Minimum Maximum Mean Std Deviation LEV 699 0,040 0,924 0,49133 0,223158 SIZE 699 23,220 31,087 26,72163 1,338001 TANG 699 0,001 0,936 0,20483 0,171952 OCF 699 -1155,966 3155,166 75,25170 331,508436 AUDIT 699 0,14 0,347 The results shown in Table 1, show the average value of each cash dividend shares are VND1,743 The level of payment of cash dividend per share of the company in the form of dispersion is quite extensive, with the largest value is VND9,500 (level of VTS Corporation, 2008) The minimum value is VND300 (the level of pay of DST Corporation - 2010 and 2011, the TNC Corporation 2008, PNC Corporation in 2009, the POT Corporation in 2011) * Correlation analysis In order to find out the correlation between the dividend per shares with each turn of the seven independent variables is put into research model Correlation analysis was given to discover correlations of each pair of the variable Table Correlation between variables in the model study DPS DPS Pearson Correlation EPS GROW LEV Sig (2-tailed) EPS GROW LEV Pearson Correlation 0,631 Sig (2-tailed) 0,000 Pearson Correlation 0,152 Sig (2-tailed) 0,000 Pearson Correlation Sig (2-tailed) ** ** -0,173 ** 0,000 0,218 ** 0,000 ** -0,054 0,137 0,153 0,000 SIZE TANG OCF AUDIT 762 | ICUEH2017 DPS SIZE TANG OCF AUDIT EPS GROW LEV ** 0,299 SIZE Pearson Correlation -0,041 0,116 Sig (2-tailed) 0,284 0,002 0,000 0,000 -0,058 -0,032 -0,040 0,057 0,126 0,402 0,285 0,136 0,039 -0,114 0,003 ** 0,178 Pearson Correlation -0,115 Sig (2-tailed) 0,002 Pearson Correlation 0,147 Sig (2-tailed) 0,000 0,000 0,298 Pearson Correlation -0,003 0,002 0,124 Sig (2-tailed) 0,946 0,964 0,001 ** ** 0,144 ** ** 0,131 ** ** 0,001 OCF AUDIT 0,361 ** 0,000 ** TANG 0,491 ** 0,000 0,115 ** 0,002 ** 0,053 0,322 0,160 0,000 **: Correlation at 0.01 significance level * Regression Results The regression results are performed with SPSS software and selecting variables will be used by the method enter The regression results for the first time will include all the variables included in the research model, based on the coefficient, the author will remove the independent variables are not correlated with the dependent variable Then, perform the regression results for the second time, and that official results of the study - Results of the complete regression with the variable studied Table Regression coefficient Model Unstandardized Coefficients Standardized Coefficients t Sig 5,791 0,000 B Std Error 3925,541 677,895 0,207 0,010 0,614 20,636 0,000 GROW 133,676 87,350 0,046 1,530 0,126 LEV -458,620 136,825 -0,104 -3,352 0,001 SIZE -103,043 26,480 -0,140 -3,891 0,000 (Constant) EPS Beta Nguyen Hoang Giang & Pham Thi Thanh Huyen | 763 Unstandardized Model TANG OCF AUDIT Coefficients Standardized Coefficients t Sig B Std Error Beta -497,478 164,504 -0,087 -3,024 0,003 0,265 0,096 0,089 2,761 0,006 138,901 94,509 0,049 1,470 0,142 Regression results are shown in Table 3, shows the independent variables include: profit (EPS), financial leverage (LEV), company size (SIZE), the structure of assets (TANG) and cash flow (OCF) has a smaller sig value 0.05 Therefore, there is a basis to determine that the EPS, LEV, SIZE, TANG, and OCF has a correlation with dividends (DPS) at the 5% significance level For variable rates of growth (GROW) worth sig is 0.126 and variable of type of auditing company (AUDIT) of value sig is 0.142, both the value of this sig is greater than 0.05 So, can conclude that the rate of growth of the company (GROW) and type of auditing company (AUDIT) has no correlation with dividends (DPS) Here are the second regression results after removal of two variables has no correlation with dividends (DPS) which is the rate of growth (GROW) and type of auditing company (AUDIT) - Results of regression after removing two variables did not correlate with dividends Before making results of regression to model after removing two variables did not correlate with dividends, the author was sure assumption in linear regression include: inspection of linear contact assumption, auditing of variance assumption wrong numbers auditing, assuming normal distribution of the residual part, assuming control of the error, the test assumes no correlation between independent variables The results show that no assumptions were violated As such, dependent variables include regression function is the dividend per share (DPS) and the independent variables include: profit (EPS), financial leverage (LEV), company size (SIZE), the structure of assets (TANG) and cash flow (OCF) is accepted 764 | ICUEH2017 Table R-squared coefficient Model R 0,661 a R Square Adjusted R Square Std Error of the Estimate Durbin-Watson 0,437 0,433 740,721 1,351 a Predictors: (Constant), OCF, LEV, TANG, EPS, SIZE Table shows R2 = 0.437 model This result demonstrates that the appropriate level of the model is 43.7%, in other words, five independent variables including profit (EPS), financial leverage (LEV), company size (SIZE) structured assets (TANG) and cash flow (OCF) was 43.7% explained the change in the company’s dividend level (DPS) Table Value Anova Model Sum of Squares df Mean Square F Sig Regression 295706411,190 59141282,238 107,791 0,000 Residual 380226329,422 693 548667,142 Total 675932740,612 698 b b Predictors: (Constant), OCF, LEV, TANG, EPS, SIZE Results shown on Table 5, shows the value sig = 0.000