The Relationship Between Investors’ Demand for Dividend and the Decision to Pay Dividend in the Future by The Firms in The Stock Exchange of Thailand
Keywords:
Investor expectations, Dividend, the Stock Exchange of ThailandAbstract
This study investigates the relationship between investors' demand for dividend and the decision to pay dividends in the future by firms listed in the Stock Exchange of Thailand. The objective of this study is to examine the factors that influence investor expectations of receiving dividends and the likelihood of firms paying dividends in the future.
The findings indicate that investor expectations of receiving dividends are influenced by a firm's investment opportunities, average size, and profitability. These factors raise investor expectations that the firm will pay dividends in the future. Moreover, the study identifies that a firm's investment opportunity, growth opportunities, average size, and profitability are factors that encourage the firm to pay dividends. The results are consistent with the study of Baker and Wurgler (2004b), except for the growth rate of total assets. This study reveals that the growth prospects of the firm have a positive association with its future prospects for dividend payments in Thailand. In contrast, developed countries predict an inverse relationship between dividend payment and the firm's growth rate. But the high-growth rate firms in Thailand can pay high dividends as they have the capability to expand their business and maintain their growth rate simultaneously.
This study contributes to the literature by providing insights into the factors that influence investor expectations of receiving dividends and the likelihood of firms paying dividends in the Stock Exchange of Thailand. The results could be beneficial to policymakers, investors, and firms in their decision-making process regarding dividends.
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