Self-Selection Models in Determination of Target Dividend Payout Ratio of Real Estate Domestic Companies Quoted on the Warsaw Stock Exchange
Real estate companies listed on the Warsaw Stock Exchange in recent years have changed their policy to pro-dividend and more and more often make decisions to pay increasing dividends. Hence a question arises about the target dividend payout ratio of these companies. In the article the Heckman model...
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| Format: | Article |
| Language: | English |
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Akademia Zamojska
2018-06-01
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| Series: | Barometr Regionalny |
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| Online Access: | https://czaz.akademiazamojska.edu.pl/index.php/br/article/view/390 |
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| author | Mieczysław Kowerski Jarosław Bielak |
| author_facet | Mieczysław Kowerski Jarosław Bielak |
| author_sort | Mieczysław Kowerski |
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Real estate companies listed on the Warsaw Stock Exchange in recent years have changed their policy to pro-dividend and more and more often make decisions to pay increasing dividends. Hence a question arises about the target dividend payout ratio of these companies. In the article the Heckman model was proposed for estimating the target dividend payout ratio. It derives from the self-selection concept, which consists of two equations: probit equation of propensity to pay dividend and Lintner’s partial adjustment equation. The conducted research has shown that Heckman’s self-selection model proved to be a very good tool for analyzing dividend decisions not only because of formal properties ensuring the consistency of the parameters estimator but also because of an accurate description of the decision process, which is of a two-step nature (decision on payment — determining the payout level). This led to the conclusion that more willing to pay dividends for a given year were real estate domestic companies, which paid dividends for the previous year (sticky dividend effect) and were more profitable and that the relation between the market value to book value of assets ratio (Tobin’s q ratio), and the propensity to pay dividends has an inverted U shape. The calculated target dividend payout ratio was 66,7% and the calculated speed of adjustment alpha = 0,626 indicates relatively slow reaching of the target.
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| format | Article |
| id | doaj-art-9d7c2249bc6d42dfb04466b9779e9ffd |
| institution | Kabale University |
| issn | 2956-686X |
| language | English |
| publishDate | 2018-06-01 |
| publisher | Akademia Zamojska |
| record_format | Article |
| series | Barometr Regionalny |
| spelling | doaj-art-9d7c2249bc6d42dfb04466b9779e9ffd2025-08-20T03:31:38ZengAkademia ZamojskaBarometr Regionalny2956-686X2018-06-0116110.56583/br.390Self-Selection Models in Determination of Target Dividend Payout Ratio of Real Estate Domestic Companies Quoted on the Warsaw Stock ExchangeMieczysław Kowerski0Jarosław Bielak1University of Management and Administration in ZamośćUniversity of Management and Administration in Zamość Real estate companies listed on the Warsaw Stock Exchange in recent years have changed their policy to pro-dividend and more and more often make decisions to pay increasing dividends. Hence a question arises about the target dividend payout ratio of these companies. In the article the Heckman model was proposed for estimating the target dividend payout ratio. It derives from the self-selection concept, which consists of two equations: probit equation of propensity to pay dividend and Lintner’s partial adjustment equation. The conducted research has shown that Heckman’s self-selection model proved to be a very good tool for analyzing dividend decisions not only because of formal properties ensuring the consistency of the parameters estimator but also because of an accurate description of the decision process, which is of a two-step nature (decision on payment — determining the payout level). This led to the conclusion that more willing to pay dividends for a given year were real estate domestic companies, which paid dividends for the previous year (sticky dividend effect) and were more profitable and that the relation between the market value to book value of assets ratio (Tobin’s q ratio), and the propensity to pay dividends has an inverted U shape. The calculated target dividend payout ratio was 66,7% and the calculated speed of adjustment alpha = 0,626 indicates relatively slow reaching of the target. https://czaz.akademiazamojska.edu.pl/index.php/br/article/view/390real estate domestic companiesWarsaw Stock Exchangeself-selection modelpropensity to pay dividendstarget dividend payout ratio |
| spellingShingle | Mieczysław Kowerski Jarosław Bielak Self-Selection Models in Determination of Target Dividend Payout Ratio of Real Estate Domestic Companies Quoted on the Warsaw Stock Exchange Barometr Regionalny real estate domestic companies Warsaw Stock Exchange self-selection model propensity to pay dividends target dividend payout ratio |
| title | Self-Selection Models in Determination of Target Dividend Payout Ratio of Real Estate Domestic Companies Quoted on the Warsaw Stock Exchange |
| title_full | Self-Selection Models in Determination of Target Dividend Payout Ratio of Real Estate Domestic Companies Quoted on the Warsaw Stock Exchange |
| title_fullStr | Self-Selection Models in Determination of Target Dividend Payout Ratio of Real Estate Domestic Companies Quoted on the Warsaw Stock Exchange |
| title_full_unstemmed | Self-Selection Models in Determination of Target Dividend Payout Ratio of Real Estate Domestic Companies Quoted on the Warsaw Stock Exchange |
| title_short | Self-Selection Models in Determination of Target Dividend Payout Ratio of Real Estate Domestic Companies Quoted on the Warsaw Stock Exchange |
| title_sort | self selection models in determination of target dividend payout ratio of real estate domestic companies quoted on the warsaw stock exchange |
| topic | real estate domestic companies Warsaw Stock Exchange self-selection model propensity to pay dividends target dividend payout ratio |
| url | https://czaz.akademiazamojska.edu.pl/index.php/br/article/view/390 |
| work_keys_str_mv | AT mieczysławkowerski selfselectionmodelsindeterminationoftargetdividendpayoutratioofrealestatedomesticcompaniesquotedonthewarsawstockexchange AT jarosławbielak selfselectionmodelsindeterminationoftargetdividendpayoutratioofrealestatedomesticcompaniesquotedonthewarsawstockexchange |