SOAS Research Online

A Free Database of the Latest Research by SOAS Academics and PhD Students

[skip to content]

Driver, Ciaran, Grosman, Anna, Scaramozzino, Pasquale and Lesame, Keagile (2023) Dividends Policy and Payouts: Evidence from South Africa. Pretoria: South African Reserve Bank Working Paper Series WP/23/03.

Text - Published Version
Download (355kB) | Preview


The theoretical framework that informs dividend studies is somewhat loose. This makes it difficult to test competing views on dividend behaviour. One view is that it reflects a useful discipline on managerial autonomy to invest; another view is that it represents a constraint on investment due to misinformed or short-term investors. As a first step in researching this issue, this paper estimates a dividend pay-out relationship for South Africa. Estimated results are obtained for separate panels of listed and unlisted non-financial firms. Among the notable results, we find that standard proxies for investment opportunity do not generally find significance. The effect of past profitability, firm size and age are in line with developed country results, but the tendency to smooth dividends seems weaker, particularly for unlisted firms. Leverage is generally negative for the listed sample in line with existing literature, but the sign is reversed for the unlisted sample. There is weak evidence that a major tax reform, effective after 2012, increased the smoothing, and possibly also the trend in the level, of dividends. Payout behaviour seems to differ considerably by industry, but ownership effects are only observable for larger firms.

Item Type: Monographs and Working Papers (Working Paper)
Keywords: Dividend policy, dividend payout, South Africa, business investment, listed companies, unlisted companies, taxation
SOAS Departments & Centres: Departments and Subunits > School of Finance & Management
Subjects: H Social Sciences > HG Finance
Copyright Statement: © South African Reserve Bank All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without fully acknowledging the author(s) and this Working Paper as the source. South African Reserve Bank Working Papers are written by staff members of the South African Reserve Bank and, on occasion, by consultants under the auspices of the South African Reserve Bank. The papers deal with topical issues and describe preliminary research findings, and develop new analytical or empirical approaches in their analyses. They are solely intended to elicit comments and stimulate debate. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the South African Reserve Bank or South African Reserve Bank policy. While every precaution is taken to ensure the accuracy of information, the South African Reserve Bank shall not be liable to any person for inaccurate information, omissions or opinions contained herein. South African Reserve Bank Working Papers are externally refereed. Information on South African Reserve Bank Working Papers can be found at Enquiries relating to the Working Paper Series can be addressed to: Head: Economic Research Department South African Reserve Bank P O Box 427 Pretoria 0001 Tel. +27 12 313 3911
Date Deposited: 30 May 2023 14:41
Funders: Other

Altmetric Data

There is no Altmetric data currently associated with this item.


Download activity - last 12 monthsShow export options
Downloads since deposit
6 month trend
6 month trend
Accesses by country - last 12 monthsShow export options
Accesses by referrer - last 12 monthsShow export options

Repository staff only

Edit Item Edit Item