TY - JOUR
T1 - Dividend payout policy of Shariah compliant firms: Evidence from United States
AU - Anwer, Z.
AU - Mohamad, S.
AU - Paltrinieri, Andrea
AU - Hassan, M. K.
PY - 2020
Y1 - 2020
N2 - 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.
AB - 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.
KW - Dividend policy
KW - Islamic finance
KW - Portfolio management
KW - Shariah compliant firms
KW - Stock screening
KW - Dividend policy
KW - Islamic finance
KW - Portfolio management
KW - Shariah compliant firms
KW - Stock screening
UR - http://hdl.handle.net/10807/178025
U2 - 10.1016/j.pacfin.2020.101422
DO - 10.1016/j.pacfin.2020.101422
M3 - Article
SN - 0927-538X
SP - 1
EP - 17
JO - Pacific Basin Finance Journal
JF - Pacific Basin Finance Journal
ER -