Determining dividend payouts of the MENA banking industry: a probit approach

Authors

  • Rola Elkabbani
  • Christian Richter German University in Cairo
  • Mona ElBannan

DOI:

https://doi.org/10.17811/ebl.9.3.2020.221-229

Abstract

The purpose of this cross-country study is to highlight the main determinants of the payout policy in the banking sector on a sample of MENA countries during the period of 2011-2016. Dividends act as a signaling tool to convey the bank’s overall stability and positive growth prospects. Large and profitable banks are more prone to distribute dividends. However, managers seek profitability and dividends distribution at the expense of high liquidity risk. Competition is the most influential determinant of dividend payout in the MENA region, in which dividends act as a control mechanism to reduce the agency costs between shareholders and managers.

Author Biography

Christian Richter, German University in Cairo

Prof of Economics, Head of Dept

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Published

13-12-2020

How to Cite

Elkabbani, R., Richter, C., & ElBannan, M. (2020). Determining dividend payouts of the MENA banking industry: a probit approach. Economics and Business Letters, 9(3), 221–229. https://doi.org/10.17811/ebl.9.3.2020.221-229