Dividend policy’s determinants: The case of Jordanian banks

Abstract

Examining the factors unique to the bank that impact dividend policy is the primary objective of this research. Dividend yield serves as the independent variable. The factors used to explain the relationship are ROA, MBV, LQ, and BS which stand for risk, liquidity and bank size. Annual data acquired from the financial reports of Jordanian banks from 2006–2023 together with a fixed effect model were used to conduct this study. There are twelve banks with two hundred and sixteen observations in this research. The study found that dividend policy in Jordanian banks is favourably impacted by ROA and LQ and the bank size (BS) variable is adversely affected by the market-to-book (MBV) variable. Banks in Jordan are unaffected by the risk (price per share/earnings per share) variable. The mentioned variables influence the factors that investors in Jordanian banks consider when making investment or dividend policy choices.