Author

  • Mian Sajid Nazir

    • COMSATS Institute of IT, Lahore, Pakistan
    • Pakistan

  • Allah Rakha

    • University of the Punjab, Lahore, Pakistan
    • Pakistan

  • Muhammad Musarrat Nawaz

    • University of the Punjab, Lahore, Pakistan
    • Pakistan

Abstract

Present study examines the relationship between corporate payout policy and market capitalization by studying payout ratio and dividend yield as measures of payout policy and controlling other variables of size, growth, EPS, Leverage, GDP growth, and Interest rates. Different statistical techniques of correlation, regression, fixed effect and random effect are applied on pooled and panel data to find out the relationship between corporate payout policy and market capitalization. The results show that measures of corporate payout policy, dividend yield and payout ratio has strong negative correlation with market capitalization. Control variables of size and leverage have positive significant correlation with market capitalization while higher earnings per share are leading it negatively and these relationships are statistically significant at various levels of significance. Overall results suggested that the corporate payout policy has significant impact on market capitalization in Pakistan and this notion is consistent with the earlier studies.

Keywords

References

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How to Cite

Nazir, M. S., Rakha, A., & Nawaz, M. M. (2012). Corporate Payout Policy and Market Capitalization: Evidence from Pakistan. Journal of Economics and Behavioral Studies, 4(6), 331-343. https://doi.org/10.22610/jebs.v4i6.333

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Research Paper

Published in

Vol. 4 No. 6 (2012) Trade, Institutions & Consumer Markets View issue contents

Published

2012-06-15

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