Determinants Of Dividend Policy in Companies Listed on The Iraq Stock Exchange: An Analysis of The Governing Factors

Abstract

This study explores the fundamental determinants of corporate dividend policy by developing a comprehensive analytical framework that integrates key theoretical perspectives with empirical evidence. It examines the channels through which financial, economic, political, and institutional factors directly and indirectly influence corporate dividend decisions, providing a broader understanding of the mechanisms governing corporate dividend behavior. The empirical analysis employs the Generalized Method of Moments (GMM) using balanced panel data from a(10compani) sample of companies listed on the Iraqi Stock Exchange during the period 2010–2020. This systematic approach addresses concerns about potential interference and captures the dynamic nature of dividend policy. The results demonstrate that dividend policy is co-shaped by firm-specific characteristics, particularly profitability, liquidity, growth opportunities, and leverage. Although the magnitude of these influences varies depending on the specifications of alternative models, their directional impact remains remarkably consistent. Profitability, liquidity, and growth opportunities exert statistically significant positive effects on dividends, while leverage is associated with a substantial negative effect. These results underscore the multidimensional nature of dividend policy and provide strong empirical evidence about the factors driving corporate dividend decisions in the context of an emerging financial market.