FACTORS DETERMINING THE DIVIDEND PAYOUT IN THE CEMENT SECTOR OF PAKISTAN 1 2

Abstract

This study examines the factors determining the dividend payout in the cement sector of Pakistan and
their impact on a dividend payout of cement firms listed in Pakistan Stock Exchange (PSX) in
Pakistan. The total population of cement sector of Pakistan consisting of 21 cement firms have been
included as a sample for the period of eight years from 2009-2016. The panel data was used retrieved
from the financial statements of the firms. Dividend payout was the dependent variable and Liquidity,
Leverage, Sales Growth, Firm Size, Profitability, Corporate Tax and Previous Dividends were the
seven independent variables. Descriptive Statistics, Correlation Test, Unit Root Test, Hausman test,
and Log-Linear Fixed Effect Model were used for analysis. Results showed that Sales Growth,
Profitability, Corporate Tax and Previous Dividends were found positively significant to dividend
payout while the Liquidity, Leverage and Firm Size were found insignificant to explain dividend
payout.