Assessing determinants of dividend policy of the government-owned companies in Indonesia

Purpose The purpose of this study is to examine the influences of financial leverage, profitability, the growth of assets and institutional ownerships on the dividend payout of the Indonesian Government-owned companies. Design/methodology/approach Annual data from the period 2007 to 2013 of the 15 listed government-owned companies on the main board in the Indonesian Stock Exchange were analyzed using the multiple regressions. Findings Except for the growth of assets that has an insignificant effect on the dividend policy, the financial leverage and institutional ownerships were documented to have negative and significant influences on the dividend policy, while the profitability has a positive and significant effect on the dividend policy. These findings imply that the profitability, financial leverage and institutional ownership should be considered as the important factors by the Indonesian Government-owned companies in determining their dividend policy. Originality/value Originality in this paper is to establish a model of leverage, profitability, asset growth and institutional ownership of dividend payments of Indonesian Government-owned companies with a panel regression approach.