The article “Corporate Dividend Policy in Practice: Evidence from an Emerging Market with a Tax-Free Environment” by Abdelaziz et al. 2010 explores the field rehearsal of dividend strategy in a developing market with a tax-free setting, specifically the UAE. The scholars investigate the dividend strategy in a developing market with a tax-free environment. Abdelaziz et al. 2010 aimed at inquiring about financial executives’ choices on dividend procedure and segment repurchases. Abdelaziz et al. 2010 achieved their aim by supervising questionnaires to the CFOs of UAE entirely publicly-listed establishments. The writers followed Brav et al. (2005) to know dividends hierarchy, repurchases, and speculation decisions to determine if the rehearsal of financial conclusions follows a confident sequence or order. Hence the authors questioned several queries on the comparative importance allocated by administrators to payout dogma.
The writers evaluated whether payout pronouncements are orthodoxly made before examining whether directors have a goal in awareness when they brand their surplus decisions. The investigators interviewed executives from 28 establishments and initiated that dividends are not only sticky, but managers likewise seem to aim for long-term payout proportion when defining dividend policy. The researchers found that payment policy is conventional and CFOs are unwilling to decrease dividends and characteristically determine their expenditure policy based on previous dividend expenses. Taxes are irrelevant; institutional depositors are anticipated to discipline bosses, and shares may control agency conflicts. Therefore, the novelists concluded the steadiness of future salaries, stock market price, and the accessibility of extra money are vital influences on UAE businesses’ dividend choices.
Chazi, Abdelaziz, Boubakri, N., & Zanella, F. (2011). Corporate dividend policy in practice: Evidence from an emerging market with a tax-free environment. Pacific-Basin Finance Journal, 19, 245–259.