Determinants of dividend payout policy – the case of listed retail companies in Vietnam, 2021

THE STATE BANK OF VIETNAM MINISTRY OF EDUCATION AND TRAINING

BANKING UNIVERSITY AT HO CHI MINH CITY

---------------------

PHAM NGUYEN HANH

DETERMINANTS OF DIVIDEND PAYOUT

POLICY – THE CASE OF LISTED RETAIL

COMPANIES IN VIETNAM

GRADUATION THESIS

FINANCE AND BANKING

CODE: 7340201

ADVISED by PhD. DUONG THI THUY AN

HO CHI MINH CITY, 2021

THE STATE BANK OF VIETNAM MINISTRY OF EDUCATION AND TRAINING

BANKING UNIVERSITY AT HO CHI MINH CITY

---------------------

PHAM NGUYEN HANH

DETERMINANTS OF DIVIDEND PAYOUT

POLICY – THE CASE OF LISTED RETAIL

COMPANIES IN VIETNAM

GRADUATION THESIS

FINANCE AND BANKING

CODE: 7340201

ADVISED by PhD. DUONG THI THUY AN

HO CHI MINH CITY, 2021

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DETERMINANTS OF DIVIDEND PAYOUT POLICY – THE CASE OF

LISTED RETAIL COMPANIES IN VIETNAM

Approved by: Advisor

PhD. Duong Thi Thuy An

Approved by: Committee

Thesis Committee

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DECLARATION

I indicate that the thesis "Determinants of dividend payout policy – the case

of listed retail companies in Vietnam" is the result of my independent studies.

Except for the references to other research works mentioned in the thesis, the thesis

conclusions are genuine and have never been published in any other research work.

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ACKNOWLEDGEMENT

During my thesis period, I received a lot of support and encouragement from

the lot of people. Without their valuable feedback, support, counsel, and advice, this

thesis would not have been completed.

First and foremost, I would like to express my appreciation to my advisor –

PhD. Duong Thi Thuy An – Lecturer at Banking University of Ho Chi Minh City ,

for her sincere and unreserved support, valuable guidance, and recommendation.

Thanks for her efforts and extensive knowledge to make my research a reality; her

suggestions, guidance, and advice are always admired and greatly contribute to the

thesis' success. I would also like to express my gratitude to the professors and

lecturers at the University of Banking for their support during my studies. The

experience and skills that I've gained have benefited me in completing this thesis.

Last but not least, my family has been the most supportive. Words fail me

whenever it comes to expressing my gratitude for my parents' unending affection. To

all of the above, as well as so many others, I simply want to convey my gratefulness

for all of your encouragement, support, and love.

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ABSTRACT

This thesis researches the factors affecting the dividend payout policy of retail

companies listed on the Ho Chi Minh City Stock Exchange (HOSE) and the Ha Noi

Stock Exchange (HNX) in the period 2011-2020. The author has collected a dataset

of 21 retail companies listed on HOSE and HNX. The thesis also assessed the

influence of factors on the dividend payout policy of retail companies listed on HOSE

and HNX during the research period.

Research data is tabular data and multivariable linear regression model in three

ways: Pooled OLS, FEM and REM. The author ran each model in turn and used the

necessary tests to choose the most suitable model. The author analyzes the results of

the most suitable model and based on the research results, the author finds that the

factors: liquidity (LIQ) has a positive relationship with dividend payout policy. The

remaining variables such as revenue growth rate (GROW), earnings per share (EPS),

and firm size (SIZE) have a negative relationship with dividend payout policy and

the variables of financial leverage (LEV) and profitability (ROA) are not statistically

significant in this research model.

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CONTENTS

LIST OF CHART.......................................................................................................i

LIST OF TABLE........................................................................................................i

LIST OF PICTURE...................................................................................................i

LIST OF ACRONYMS ........................................................................................... ii

CHAPTER 1: OVERVIEW .....................................................................................1

1.1. INTRODUCTION............................................................................................1

1.1.1. Research background...........................................................................1

1.1.2. Research issue and the urgency of the topic.......................................1

1.2. AIM OF STUDY AND RESEARCH QUESTIONS .....................................3

1.2.1. Aim of study ..........................................................................................3

1.2.2. Research question .................................................................................3

1.3. OBJECT AND SCOPE OF THE STUDY .....................................................4

1.3.1. Object of study ......................................................................................4

1.3.2. Scope of study........................................................................................4

1.4. RESEARCH METHOD...................................................................................4

1.5. CONTRIBUTION OF THE RESEARCH.....................................................5

1.6. PROPOSED THESIS STRUCTURE.............................................................5

CONCLUSION CHAPTER 1 ..................................................................................7

CHAPTER 2: THEORETICAL FOUNDATION AND LITERATURE

REVIEW OF FACTORS AFFECTING DIVIDEND PAYOUT POLICY.........8

2.1. THEORETICAL FOUNDATION FOR DIVIDEND PAYOUT POLICY.8

2.1.1. Overview of dividend and dividend payout policy ............................8

2.1.2. Dividend payout policies ....................................................................12

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2.1.3. Theoretical foundation of the research.............................................15

2.2. LITERATURE REVIEW..............................................................................16

CONCLUSION CHAPTER 2 ................................................................................22

CHAPTER 3: RESEARCH DESIGN AND DATA .............................................23

3.1. RESEARCH DESIGN ...................................................................................23

3.1.1. Research model ...................................................................................23

3.1.2. Hypothesis and representative variables for the study ...................24

3.1.3. Methodology........................................................................................27

3.2. DATA...............................................................................................................29

CONCLUSION CHAPTER 3 ................................................................................31

CHAPTER 4: RESULTS OF THE RESEARCH ................................................32

4.1. DESCRIPTIVE STATISTICS ......................................................................32

4.2. CORRELATION ANALYSIS AND COLLINEARITY DIAGNOSTICS .39

4.3. REGRESSION RESULT ................................................................................40

4.3.1. Model selection .......................................................................................40

4.3.2. Regression result of Random effect model (REM)..............................41

4.3.3. Testing and fixing defects of the REM model......................................42

4.3.4. Result discussion.....................................................................................43

CONCLUSION CHAPTER 4 ................................................................................47

CHAPTER 5: CONCLUSION, RECOMMENDATIONS AND LIMITATION

OF THE RESEARCH.............................................................................................48

5.1. CONCLUSION: ...............................................................................................48

5.2. RECOMMENDATIONS.................................................................................49

5.3. LIMITATION ..................................................................................................51