Internal Dynamics of Dividend Policy in East-Asia: A Comparative Study of Japan and South Korea
Japanese and Korean financial systems are distinct from those in the western economies. Considering this, we examine how the dividend policy of the firms in two of the largest economies of East Asia is determined by the internal attributes of firms. Firm-level data from 1,773 Japanese and 1,035 Kore...
| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
SAGE Publishing
2022-04-01
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| Series: | SAGE Open |
| Online Access: | https://doi.org/10.1177/21582440221095499 |
| _version_ | 1818029264662953984 |
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| author | Basharat Khan Qiujun Zhao Amjad Iqbal Irfan Ullah Shahab Aziz |
| author_facet | Basharat Khan Qiujun Zhao Amjad Iqbal Irfan Ullah Shahab Aziz |
| author_sort | Basharat Khan |
| collection | DOAJ |
| description | Japanese and Korean financial systems are distinct from those in the western economies. Considering this, we examine how the dividend policy of the firms in two of the largest economies of East Asia is determined by the internal attributes of firms. Firm-level data from 1,773 Japanese and 1,035 Korean firms were evaluated using panel data techniques, and some interesting similarities and differences in the dividend policies of both countries were unearthed. For example, in both countries, larger firms pay higher dividends, whereas those firms with volatile earnings pay low dividends. It was also determined that Korean firms pay more dividends when their profitability surges. On the other hand, cash dividends in Japanese firms decline when there is an increase in their profitability level. Overall, the dividend policy of Korean firms resembles more to those in Anglo-Saxon countries, while the dividend policy of Japanese firms bears little resemblance to other established financial systems. This study is the first to compare and contrast the internal dynamics of dividend policy for both the Japanese Keiretsus and Korean Chaebols while evaluating a huge universe of firms from both countries. Transnational studies are important to draw parallels and differences. The findings of this study offer important implications for various stakeholders, including managers, investors, and policymakers. Also, the results pave the way for a theoretically enriched understanding of dividend policy by comparing and contrasting diverse financial systems. |
| first_indexed | 2024-12-10T05:16:56Z |
| format | Article |
| id | doaj.art-55322fd8b1804568978646356b5e756d |
| institution | Directory Open Access Journal |
| issn | 2158-2440 |
| language | English |
| last_indexed | 2024-12-10T05:16:56Z |
| publishDate | 2022-04-01 |
| publisher | SAGE Publishing |
| record_format | Article |
| series | SAGE Open |
| spelling | doaj.art-55322fd8b1804568978646356b5e756d2022-12-22T02:00:56ZengSAGE PublishingSAGE Open2158-24402022-04-011210.1177/21582440221095499Internal Dynamics of Dividend Policy in East-Asia: A Comparative Study of Japan and South KoreaBasharat Khan0Qiujun Zhao1Amjad Iqbal2Irfan Ullah3Shahab Aziz4Hazara University, Mansehra, PakistanInternational Business College, Dalian Minzu University, Dalian, ChinaHazara University, Mansehra, PakistanDongbei University of Finance and Economics, Dalian, ChinaBahria University, Islamabad, PakistanJapanese and Korean financial systems are distinct from those in the western economies. Considering this, we examine how the dividend policy of the firms in two of the largest economies of East Asia is determined by the internal attributes of firms. Firm-level data from 1,773 Japanese and 1,035 Korean firms were evaluated using panel data techniques, and some interesting similarities and differences in the dividend policies of both countries were unearthed. For example, in both countries, larger firms pay higher dividends, whereas those firms with volatile earnings pay low dividends. It was also determined that Korean firms pay more dividends when their profitability surges. On the other hand, cash dividends in Japanese firms decline when there is an increase in their profitability level. Overall, the dividend policy of Korean firms resembles more to those in Anglo-Saxon countries, while the dividend policy of Japanese firms bears little resemblance to other established financial systems. This study is the first to compare and contrast the internal dynamics of dividend policy for both the Japanese Keiretsus and Korean Chaebols while evaluating a huge universe of firms from both countries. Transnational studies are important to draw parallels and differences. The findings of this study offer important implications for various stakeholders, including managers, investors, and policymakers. Also, the results pave the way for a theoretically enriched understanding of dividend policy by comparing and contrasting diverse financial systems.https://doi.org/10.1177/21582440221095499 |
| spellingShingle | Basharat Khan Qiujun Zhao Amjad Iqbal Irfan Ullah Shahab Aziz Internal Dynamics of Dividend Policy in East-Asia: A Comparative Study of Japan and South Korea SAGE Open |
| title | Internal Dynamics of Dividend Policy in East-Asia: A Comparative Study of Japan and South Korea |
| title_full | Internal Dynamics of Dividend Policy in East-Asia: A Comparative Study of Japan and South Korea |
| title_fullStr | Internal Dynamics of Dividend Policy in East-Asia: A Comparative Study of Japan and South Korea |
| title_full_unstemmed | Internal Dynamics of Dividend Policy in East-Asia: A Comparative Study of Japan and South Korea |
| title_short | Internal Dynamics of Dividend Policy in East-Asia: A Comparative Study of Japan and South Korea |
| title_sort | internal dynamics of dividend policy in east asia a comparative study of japan and south korea |
| url | https://doi.org/10.1177/21582440221095499 |
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