Dividend payout policy of Shariah compliant firms: Evidence from United States

Z. Anwer, S. Mohamad, Andrea Paltrinieri, M. K. Hassan

Research output: Contribution to journalArticle

2 Citations (Scopus)


This paper investigates the effects of religious screening on payout behavior of US firms. Shariah compliant (SC) indices serve as suitable sample as they are emerging as alternative investment class in the last two decades. Through an analysis of a sample of US firms belonging to Dow Jones proprietary database for the period 2006–2018, this study provides evidence that SC firms are more prone to make total payout, cash dividends and repurchases. We use panel logistic regressions with industry and year fixed effects. The findings reveal that the drivers of higher propensity of total payout are higher profitability, higher retained earnings, lower debt capital structure and lower asset growth. The factors that contribute to likelihood of paying higher cash dividends are higher profitability, lower governance levels and lower market/book assets ratio. Moreover, better governance, lower asset growth and lower equity/assets increase the propensity of SC firms to make higher repurchases. These findings are important contribution to the Islamic corporate finance and dividend policy literature.
Original languageEnglish
Pages (from-to)1-17
Number of pages17
Publication statusPublished - 2020


  • Dividend policy
  • Islamic finance
  • Portfolio management
  • Shariah compliant firms
  • Stock screening


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