Firm Location on Dividend Policy : Case in Indonesia Stock Exchange Muhammad Saiful Hakim(a*) Chih Liang Liu (b)
(a) institut Teknologi Sepuluh Nopember
Kampus ITS Sukolilo Surabaya Indonesia
* ms_hakim[at]mb.its.ac.id
(b) National Yunlin University of Science and Technology
123 University Road Douliu, Yunlin Taiwan
Abstract
The present study investigated the impact of business location within the Indonesian context on corporate dividend policy. The variable representing the location in this study was defined as the geographical position of firms in Jakarta, the capital city of the state, as well as the firms located in Java, where the three major cities in Indonesia are located. The findings of this study revealed that companies located on Java Island had comparatively lower payout ratios in comparison to firms located elsewhere. In contrast, a lack of empirical evidence exists regarding the variation in payout rates among enterprises in Jakarta. Further companies located outside of major financial centers exhibit a tendency to distribute higher dividends to their shareholders, indicating the existence of heightened information asymmetry for these organizations. The findings remain constant even after doing several robustness tests, such as employing alternative measures for dividend policy, excluding the crisis period, and excluding the top and lower groups in the research sample.
Keywords: Firm Location, Dividend Policy, Dividend Payout Ratio
