Factors affecting dividend policy of listed manufacturing enterprises: A governance context

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Abstract

Dividend policy is a critical issue for both businesses and investors. While businesses aim to establish optimal dividend policies to balance reinvestment and shareholder satisfaction, investors are drawn to attractive policies that promise tangible returns. The dividend policies of 74 manufacturing businesses listed on the Ho Chi Minh City Stock Exchange (HOSE) are examined in this study in three different time periods: before COVID-19 (2018–2019), during COVID-19 (2020–2021), and after COVID-19 (2022). The research focuses on five key variables: the previous year’s cash dividend payout ratio (DPR), earnings per share (EPS), return on assets (ROA), revenue growth rate, and liquidity. Utilizing panel data regression models and SPSS 26 software, the findings reveal that four out of the five variables significantly affect dividend policy, though their impact varies across different phases. Notably, the previous year’s DPR consistently exerts the strongest influence, while EPS and ROA also play pivotal roles. The revenue growth rate negatively impacts dividend policy during the pre-pandemic period but loses significance during the pandemic. Liquidity, however, shows no notable correlation across all three periods. These results align with existing studies on dividend policy determinants (Ahmed & Javid, 2008; Khalaf et al., 2023), reinforcing the importance of profitability, historical trends, and resilience during economic fluctuations. The results underscore the importance of strategic dividend decisions, especially during economic disruptions like COVID-19.

Keywords: Dividend, Dividend Policy, Listed Enterprises, Finance, Accounting

Authors’ individual contribution: Conceptualization — T.N.T., D.V.D., T.H.N.T., and T.T.P.T.; Methodology — D.V.D., D.D.T., and T.T.P.T.; Software — N.L.D.T., V.H.N., and T.T.P.T.; Validation — T.N.T., D.V.D., and V.H.N.; Formal Analysis — D.V.D., T.H.N.T., N.L.D.T., and V.H.N.; Investigation — T.N.T., D.V.D., and D.D.T.; Resources — N.L.D.T., V.H.N., and T.T.P.T.; Data Curation — D.D.T., V.H.N., and T.T.P.T.; Writing — T.N.T., D.V.D., N.L.D.T., D.D.T., and T.T.P.T.; Visualization — T.H.N.T., N.L.D.T., V.H.N., and T.T.P.T.; Supervision — T.N.T., D.D.T., and V.H.N.; Project Administration — T.N.T., T.H.N.T., and V.H.N.; Funding Acquisition — T.N.T., T.H.N.T., and N.L.D.T.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: F650, M100, M400, M410

Received: 21.09.2024
Revised: 13.12.2024; 20.02.2025; 17.03.2025
Accepted: 08.04.2025
Published online: 11.04.2025

How to cite this paper: Tran, T. N., Duong, D. V., Nguyen Thi, T. H., Do Thi, N. L., Truong, D. D., Nguyen, V. H., & Pham Thi, T. T. (2025). Factors affecting dividend policy of listed manufacturing enterprises: A governance context. Journal of Governance & Regulation, 14(2), 38–48. https://doi.org/10.22495/jgrv14i2art4