Product market competition, regulation and dividend payout policy of Malaysian banks
Journal of Financial Regulation and Compliance
ISSN: 1358-1988
Article publication date: 14 November 2008
Abstract
Purpose
This paper aims to investigate the impact of the product market competition, regulations on the dividend policies of the listed banks, over the period 1995‐2005 in Malaysia.
Design/methodology/approach
An ordered probit modelling technique and target adjustment model is used.
Findings
Significant differences are found in the payout of the banks categorized as selling non‐interest based banking products and mix of both interest and non‐interest based banking products. It is found that the decision to increase dividends is significantly related to earnings, and the decision to cut dividend is significantly related to the changes in the non‐performing loans, corporate and real estate sectors loans ratio and earnings losses.
Research limitations/implications
The research findings have implications for the regulators of banks.
Originality/value
The research provides a clear link between banks' portfolio choice and earnings that have implications for dividends in emerging markets.
Keywords
Citation
Ameer, R. (2008), "Product market competition, regulation and dividend payout policy of Malaysian banks", Journal of Financial Regulation and Compliance, Vol. 16 No. 4, pp. 318-334. https://doi.org/10.1108/13581980810918396
Publisher
:Emerald Group Publishing Limited
Copyright © 2008, Emerald Group Publishing Limited