THE EFFECT OF DIVIDEND DISTRIBUTION POLICIES ON FINANCIAL PERFORMANCE: AN APPLICATION ON BIST DIVIDEND 25 INDEX

Abstract

The decision of the companies to distribute profit to their partners during the year, how much of them will be distributed and how much will be kept within the company, and the method of distribution is defined as dividend distribution policies. The strategies that companies follow while determining their dividend distribution policies have an impact on the company's performance. The aim of this study is to analyze the effect of dividend distribution policies of 25 companies within the scope of BIST Dividend 25 Index on financial performance. The implementation period is based on the 10 years between 2009-2018. In the study, panel regression analysis method was implemented. Equity profitability and asset profitability variables were used to analyze the financial performance of companies. As the dividend distribution policies of companies, whether the dividends are distributed or not and the dividend payout ratio variables are used. Since it is thought to have an impact on financial performance, the total assets and leverage ratio of the companies are also included in the model of the study. As a result of the applied panel regression analysis; it has been determined that dividend payout ratio and equity profitability and asset profitability are singnificant and positively related, leverage ratio and equity profitability and asset profitability are singnificant and negatively related, firm size and equity profitability and asset profitability are significant and positively related, and that there is a positive and enhancing effect on the equity profitability and asset profitability of dividend distribution.