Description
Title: Indonesian Corporate Dividend Policy and the COVID-19 Pandemic: Static and Dynamic Panel Data Approaches
Abstract: This study investigates how Indonesia’s dividend policy has been impacted by the COVID-19 pandemic crisis. Data from corporations listed on the IDX from 2014 to 2020 were collected using the purposive sampling technique, and both static and dynamic panel data approaches were used to analyze the results. For the static panel data regression, fixed-effect models (FEM) were chosen. The robustness of the estimated dynamic panel data was assessed using the first difference-generalized method of moments (FD-GMM) and the system-generalized method of moments (SYS-GMM). The findings demonstrated that the pandemic-related crisis increased the SYS-GMM dividend distribution. Companies also continued to pay dividends, which served as a good signal to investors and improved the capital market’s slow trading conditions. Profitability and dividends paid in prior years have a significant positive impact on dividend policy. The findings also indicated that age has an impact on the dividend policy for FD-GMM. Firm size and financial leverage both have significant effects on FD-GMM in different ways, but investment opportunity has no impact on dividend policy. According to statistics, the dynamic model’s estimates were not significantly different from the parameters formed by the FEM that was chosen, both in terms of significance and the coefficient of influence direction. The robust test with the dynamic model also revealed that the omitted variable bias occurs. This study is also consulted when thinking about investors’ investment choices in the context of the new normal. As a result, the dividend policy may be viewed as sending a positive message to investors who have access to stock trading on the capital market.
Keywords: dividend policy; COVID-19 pandemic; crisis; static panel data regression; dynamic panel data regression
Paper Quality: SCOPUS / Web of Science Level Research Paper
Subject: Economics
Writer Experience: 20+ Years
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