Determining dividend payouts of the MENA banking industry: a probit approach

• Rola Kabbani ^[3] ; Christian Richter ^[1] ; Mona ElBannan ^[2]
  1. [1] Coventry University

     Coventry University

     Reino Unido

     
  2. [2] German University in Cairo

     German University in Cairo

     Egipto

     
  3. [3] German International University in New Capital city,New Capital City,Egypt

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• Localización: Economics and Business Letters, ISSN-e 2254-4380, Vol. 9, Nº. Extra 3, 2020 (Ejemplar dedicado a: Selected papers from 7th International PhD Meeting in Economics 2019), págs. 221-229
• Idioma: inglés
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• Resumen

  • The purpose of this cross-country study is to highlight the main determinants of the payout policy in the banking sector on a sample of MENA countries during the period of 2011-2016. Dividends act as a signaling tool to convey the bank’s overall stability and positive growth prospects. Large and profitable banks are more prone to distribute dividends. However, managers seek profitability and dividends distribution at the expense of high liquidity risk. Competition is the most influential determinant of dividend payout in the MENA region, in which dividends act as a control mechanism to reduce the agency costs between shareholders and managers.