<abstract xmlns="http://www.w3.org/1999/xhtml"><p> Usage of a random effects panel logit model have shown in this paper that the high propensity to pay dividends by the state-controlled companies quoted on the Warsaw Stock Exchange over the last years was not a result of the tunneling effect but was the maturity effect. The state-controlled companies which pay dividends fulfil the maturity effect criteria as they are big, profitable, have low investment opportunities and financial leverage, and are characterised by low risk associated with investing in their shares. The additional evidence of a reasonable and stable dividend policy pursued by the state-controlled companies are: payout ratio on the level of slightly more than 50% and lower by almost 8 percentage points than in the other companies; and relatively rare use of the reserve capital for dividends. However, state-controlled companies listed on the WSE are mostly commercial and of a fiscal nature for the state, which may create a temptation for tunneling.</p></abstract>

Usage of a random effects panel logit model have shown in this paper that the high propensity to pay dividends by the state-controlled companies quoted on the Warsaw Stock Exchange over the last years was not a result of the tunneling effect but was the maturity effect. The state-controlled companies which pay dividends fulfil the maturity effect criteria as they are big, profitable, have low investment opportunities and financial leverage, and are characterised by low risk associated with investing in their shares. The additional evidence of a reasonable and stable dividend policy pursued by the state-controlled companies are: payout ratio on the level of slightly more than 50% and lower by almost 8 percentage points than in the other companies; and relatively rare use of the reserve capital for dividends. However, state-controlled companies listed on the WSE are mostly commercial and of a fiscal nature for the state, which may create a temptation for tunneling.

High Propensity to Pay Dividends By State-Controlled Companies in Poland. Tunneling or Maturity Effect?

Department of Macroeconomics, University of Informati on Technology and Management in Rzeszów,

Financial Internet Quarterly

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Usage of a random effects panel logit model have shown in this paper that the high propensity to pay dividends by the state-controlled companies quoted on the...

High Propensity to Pay Dividends By State-Controlled Companies in Poland. Tunneling or Maturity Effect?

Published Online: Feb 08, 2017

Page range: 64 - 73

Received: May 26, 2015

Accepted: Mar 08, 2016

DOI: https://doi.org/10.1515/fiqf-2016-0130

Keywords
Warsaw Stock Exchange, state-controlled companies, dividend policy, maturity effect, tunneling effect

© 2017

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

High Propensity to Pay Dividends By State-Controlled Companies in Poland. Tunneling or Maturity Effect?

Published Online: Feb 08, 2017

Page range: 64 - 73

Received: May 26, 2015

Accepted: Mar 08, 2016

DOI: https://doi.org/10.1515/fiqf-2016-0130

KeywordsWarsaw Stock Exchange, state-controlled companies, dividend policy, maturity effect, tunneling effect

© 2017

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
Warsaw Stock Exchange, state-controlled companies, dividend policy, maturity effect, tunneling effect