بی ثباتی در سیاست های سود سهام شرکت های بورس اوراق بهادار استانبول (ISE) : شواهد حاصل از بازار در حال ظهور

Dividend policy behaviour of corporations operating in emerging markets is significantly different from the widely accepted dividend policy behaviour of corporations operating in developed markets. This study provides evidence from the Istanbul Stock Exchange (ISE), an emerging European stock market, and analyses empirically whether the ISE corporations follow stable cash dividend policies in a regulatory environment that imposed mandatory dividend policies. Unlike the empirical results supporting the stable dividend policy behaviour of corporations operating in developed markets, the empirical results show that the ISE corporations follow unstable cash dividend policies and the main factor that determines the amount of cash dividends is the earnings of the corporation in that year.

Dividend policy has attracted a great deal of research and still keeps its prominent place in the finance literature. However, it is still not satisfactorily explained why corporations distribute a substantial portion of their earnings as dividends or why investors pay attention to dividends. This is known as the ‘dividend puzzle’ in the finance literature (Black, 1976) and several hypotheses have been put forward in order to shed some light on this puzzle. The Miller and Modigliani (1961) dividend irrelevance proposition states that a managed dividend policy cannot increase (decrease) shareholders’ wealth in a complete and perfect market as long as it does not alter the investment policy of the corporation. However, the capital market is neither perfect nor complete. The complete and perfect capital market assumptions of the dividend irrelevance proposition have been researched vigorously, especially focusing on the effects of taxes, information content of dividends, agency cost and institutional constraints. The research and theory on the dividend policy have also been influenced by the empirical observations about the market, corporate and investor attitude towards the dividend policy (see Lease et al., 2000, Megginson, 1997 and Allen and Michaely, 1995). Two prominent empirical observations on dividend policy show that corporations follow stable dividend policies and pay out a substantial portion of their earnings as dividends (Lintner, 1956). Emerging markets add more pieces to the ‘dividend puzzle’ and have recently attracted research trying to explain the dividend policy behaviour of corporations operating in these markets (Glen et al., 1995). As emerging markets get a bigger portion of global equity investments, international investors are more concerned with the dividend policy behaviour of emerging market corporations. The focus of this research is to study how the corporations that trade in the Istanbul Stock Exchange (ISE), an emerging European stock market, set their dividend policies in a different institutional environment and to research empirically whether they follow stable dividend policies as in developed markets where dividend smoothing is a management tendency. Unlike the stable dividend policy behaviour of the corporations trading in developed capital markets, this research provides evidence from the ISE in which corporations follow unstable dividend policies. Specifically, regulations imposed mandatory dividend policies on the ISE corporations during the 1985–1994 fiscal years and mandatory dividend policies are still used in both developed and developing countries such as Germany, Switzerland, Brazil, Chile, Colombia, Venezuela, Greece and Philippines (La Porta et al., 2000 and Lease et al., 2000, p. 138; Glen et al., 1995). In a broad sense, this study shows how sensitive the financial decision making is to institutional and regulatory environments which can vary from country to country. With the establishment of the Istanbul Stock Exchange in 1986 and the advances in the information technology, the number of empirical studies on the Turkish stock market has increased substantially. Since its establishment in 1986, the ISE has followed a fast pace growth in terms of trading volume, market capitalisation, number of listed corporations and foreign investment. As of 1999, 285 corporations are traded in the exchange with an average daily trading volume of $356 million relative to $3 million average daily trading volume in 1989. In terms of monthly turnover velocity, the ISE has surpassed several European stock exchanges such as Paris, Stockholm, Amsterdam, Vienna, Brussels, Helsinki and Luxembourg. With a market capitalisation of $114 billion, it is bigger than the capitalisation of Lisbon, Vienna, Luxembourg and Warsaw stock exchanges and is ranked 30th in the world (The Istanbul Stock Exchange Review, 1999 and Birsen, 1999). Moreover, Turkey, a candidate for European Union membership and a member of G-20, has a very liberal foreign exchange regime and as of 1999, international investors possess half of the market value of the shares trading in the ISE. The organisation of the article is as follows. The following section reviews the regulatory environment for the dividend policy of the ISE corporations. The third section reviews the international empirical evidence on dividend stability and discusses briefly the factors that affect the dividend policies of corporations. The fourth section presents the model, the sample data and the estimation methodology. In the fifth section, the empirical results are presented followed by the conclusion focusing on implications and ideas for further research.

Since the pioneering article of Lintner in 1956, there has been an extensive amount of research on the dividend policy decision making of corporations, especially in countries that have developed capital markets and established corporate governance rules. This empirical research contributes to the financial literature by investigating the dividend policy decision making of the corporations trading in the Istanbul Stock Exchange. The ISE is an emerging European stock exchange whose history only dates back to 1986 relative to the developed stock exchanges with hundreds of years historical development. Moreover, there have been some changes in the dividend policy regulations since 1986, especially the significant 1995 regulatory change that abandoned the mandatory dividend policy of distributing at least 50% of earnings as cash dividends and granted the ISE corporations the freedom of setting their own dividend policies. The empirical research focuses on two time periods, 1985–1994 and 1995–1997, and during both time periods, the ISE corporations follow unstable dividend policies. The main factor that determines the amount of cash dividends that will be distributed is the earnings of the corporation in that year. Any variability in the earnings of the corporation is directly reflected in the level of cash dividends. In other words, earnings instability results in instability in dividends. This result is in line with the Glen et al. (1995) finding that ‘emerging market firms often do have a target dividend payout ratio like their developed country counterparts, but they are generally less concerned with volatility in dividends over time and, consequently, dividend smoothing over time is less important’ (p. 24). Even though the 1995 regulatory change has provided extensive flexibility in the dividend policy making, the ISE corporations have continued to follow unstable dividend policies. After the 1995 regulatory change, a structural shift is detected in the Lintner model resulting in a negative constant term and a lower target payout ratio. Additionally, there has been a substantial increase in the number of corporations that stopped paying cash dividends and used the resources for internal financing. In the light of these findings, it is possible to put forward the view that there are significant differences between the ISE corporations’ and the developed market corporations’ dividend policies. Moreover, this view is very likely to be true for the other emerging markets (see Glen et al., 1995) and international investors should be aware of these differences in making their investment decisions. Academically, further research should be undertaken in order to see whether unstable dividend policies have any effect on the information signalling power of the dividend policy announcements of the ISE corporations.