Abstract:
Zimbabwe experienced hyperinflation (2000-2008) followed by dollarization from 2009
onwards which had implications on dividend policy. In this context, this study isolates the
main determinants and examines their behaviour across the distribution of dividend policy.
The study employs quantile regression analysis and a sample of 30 firms listed on the
Zimbabwe Stock Exchange (ZSE), covering the period 2000 to 2016. The fixed effects (FE)
analysis is applied as a base model.
The most robust determinants are ownership structure, earnings per share (EPS) and
taxation. In our context, results are more informative, than those based on FE analysis by
showing the change in the impact of each explanatory variable across the distribution. EPS
has a positive and significant impact on dividend policy throughout the distribution in both
sample periods. Its effect increases in magnitude as firms move from low to high quantiles.
The other variables are useful in explaining dividend policy at selected points of the
distribution. Thus, there is clear heterogeneity in the determinants of dividend policy.
Research limitations/implications:
The study shows the importance of developing a dividend policy by focusing on the firm's position on distribution. A dividend policy should be developed because of the earnings.
The potential of the firm, ownership concentration and perceived changes in fiscal policy. A well-designed policy should have a differentiated approach to influencing corporate dividends.
