Authors: Evangelos Chytis, Chris Karalis, Stergios Tasios, Athanasios Mandilas

Title: Determinants of Corporate Dividend Policy in periods of financial distress

Abstract

Purpose – Decisions relating to the distribution or not of dividends, as well as their level are among the most important corporate issues due to its significant impact on investment and financing decisions. The purpose of this study is to examine which factors influence the dividend policy of listed companies in periods of economic distress. The factors under examination include profits per share, dividends of prior year, debt to total assets ratio, sales, undistributed profits to total assets ratio, cash flow, free cash flow, risk level, concentration of ownership of the share capital and company size.

Design/methodology/approach – The sample included listed on the Athens stock exchange companies and covers the period 2011 – 2015. Research data were retrieved from ICAP database and hand - collected from each company’s annual financial reports. In analyzing the data, the study used panel regression models.

Findings show that during the economic crisis dividends per share are significantly associated with dividends of prior year, cash flow and undistributed profits to total assets ratio.

Practical implications– Results of the study may be useful to management in the decision-making process regarding dividend policy planning, as well as to the shareholders and potential investors.