Dividend Policy Behavior in Emerging Stock Markets: Evidence from Vietnamese Stock Market

Abstract

Several prior studies find that firms pursue a long-term dividend target payout ratio with a fairly standardized speed of adjustment in developed markets. However, some studies conducted in emerging markets show strange findings that firms have target dividend payout ratios but they fail to follow stable dividend polices. This study examines dividend policy behavior in Vietnamese stock market, an emerging stock market without mandatory dividend payment using fixed effects regression for panel data. The research results support the partial adjustment model that firms in Vietnamese stock market have stable dividend policy behavior.