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What do we know about the dividend puzzle? – A literature survey

Basil Al-Najjar (Department of Accountancy, Finance and Economics, Business School, University of Huddersfield, Huddersfield, UK)
Erhan Kilincarslan (Department of Accountancy, Finance and Economics, University of Huddersfield, Huddersfield, UK)

International Journal of Managerial Finance

ISSN: 1743-9132

Article publication date: 13 March 2019

Issue publication date: 20 March 2019

2145

Abstract

Purpose

The purpose of this paper is to shed light on the ongoing debate of dividend policy, which is considered one of the most controversial topics in corporate finance literature.

Design/methodology/approach

The paper provides a survey of literature; it, first, outlines the main theoretical arguments of dividend policy and then critically discusses the most important and influential previous empirical studies in the dividend literature.

Findings

The analysis of literature review detects that no general consensus has yet been reached after many decades of investigation, despite extensive debate and countless research. Consequently, the main motivation for paying dividends is still unsolved and thus remains as a puzzle. In addition, there is no doubt that carrying the dividend debate into the context of emerging markets attaches more pieces to this puzzle.

Originality/value

This paper offers an updated and more comprehensive survey of literature by examining the relationship between theory and practice from both developed and emerging markets.

Keywords

Citation

Al-Najjar, B. and Kilincarslan, E. (2019), "What do we know about the dividend puzzle? – A literature survey", International Journal of Managerial Finance, Vol. 15 No. 2, pp. 205-235. https://doi.org/10.1108/IJMF-03-2018-0090

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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