Determinants of Dividend Payout in Ethiopian Private Banks
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Date
2015-06
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Addis Ababa University
Abstract
The main purpose of the study was to examine the determinants of dividend payout in Ethiopian
private banks. Five years data from 2009/10 to 2013/14 were collected from National bank of
Ethiopia and banks audited financial statement. The collected data were analyzed using panel
data regression technique. The study used dividend payout as a dependent variable and seven
independent variables; they are profitability, liquidity, leverage, lagged dividend payout, growth,
size and risk. The finding indicated that among the seven independent variables; lagged dividend
payout, growth, size and risk have statistically significant impact on dividend payout; the rest
three variables have no statistical significant impact on dividend payout. Therefore, lagged
dividend payout, growth, size and risk have a significant impact on dividend payout in Ethiopian
private banks and board of directors of banks need to consider these variables while designing
their dividend payout policy; on the same token investors need to consider these variables in
their investment decisions when they want to make an investment in Ethiopian private banks.
Key words: Dividend payout, private banks
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Keywords
Dividend payout; private banks