Conventional Determinants of Dividend Payout Policy, Does Cross-Listing Matter?

Abstract

Corporate payout policy has garnered attention in corporate finance literature. Despite substantial study, opinions on the main factors affecting firm payout policy vary. Researchers have focused on developed markets and one dividend policy feature. Thus, this study examines how cross-listing, ownership structure, and firm-level characteristics like investment opportunity and free cash flow affect the dividend payout ratio and dividend decision for Egyptian cross-listed firms on the Egyptian and London stock exchanges. Compare the findings to single-listed firms exclusively listed on the Egyptian stock exchange. Control variables include leverage, profitability, liquidity, and firm size in this study. The sample for this study includes all Egyptian cross-listed and trading single-listed firms from 2007 to 2020. The results show that profitability and firm size affect cross-listed firms' dividend payout ratio. For single-listed firms, investment opportunity, profitability, and firm size affect dividend payout ratio. For the payout decision model, cross-listing, ownership structure, profitability, investment opportunity, leverage, and firm size are significant determinants for cross-listed firms, while profitability, liquidity, and firm size are significant for single-listed firms. The findings reveal that cross-listing significantly affect the dividend decision.