Determinants of payout policy and investment attractiveness of companies listed on the Warsaw Stock Exchange

Main Article Content

Aleksandra Pieloch-Babiarz


Research background: Making decisions concerning the payout policy depends on many diversified neoclassical and behavioral determinants. Although these factors are well-described in the literature, there is still a research gap concerning the lack of a comprehensive impact model of payout policy determinants on the investment attractiveness of shares.

Purpose of the article: The aim of this paper is to present the diverse nature of the relation-ship between different forms of cash transfer to the shareholders and in-vestments attrac-tiveness of public companies in the context of various determinants of payout policy. The possibility of achieving this objective was conditioned by the empirical verification of research hypothesis stating that the diversify of payout forms is accompanied by the different determinants of payout policy that condition an effective investment of stock investors’ capital.

Methods: The empirical research was conducted among the electromechanical companies listed on the Warsaw Stock Exchange in the years 2006-2015. The data for analysis were obtained from Notoria Service database and Stock Exchange Yearbooks. The calculations were carried out using the methodology of taxonomic measure of investment attractiveness, as well as dividend premium and share repurchase premium.

Findings & Value added: The final conclusion of our research is that the companies con-ducting the payout policy in different forms of cash transfer differ in terms of many charac-teristics, such as: financial standing, market value, ownership structure, company’s size and age. Moreover, their investment attractiveness differs according to regularity of payment, stock exchange situation and shareholders’ preferences. The value added of this paper is a new approach to the evaluation of capital investment with a special emphasis on the determinants of payout policy.

Article Details

How to Cite
Pieloch-Babiarz, A. (2017). Determinants of payout policy and investment attractiveness of companies listed on the Warsaw Stock Exchange. Equilibrium. Quarterly Journal of Economics and Economic Policy, 12(4), 675-691.
Financial markets


Allen, F., & Michaely, R. (2003), Payout policy. In G. Constantinides, M. Harris, & R. Stulz. (Eds.). Handbooks of the economics of finance. Amsterdam: North-Holland.
Baker, M., & Wurgler, J. (2004). Appearing and disappearing dividends: the link to catering incentives. Journal of Financial Economics, 73(2). doi: 10.1016/j. jfineco.2003.08.001.
Billett, M. T., & Xue, H. (2002). The takeover deterrent effect of open market share repurchases. Journal of Finance, 62(4). doi: 10.1111/j.1540-6261.2007.01258.x.
Brav, A., Graham, J. R., Harvey, C. R., & Michaely, R. (2005). Payout policy in the 21st century. Journal of Financial Economics, 77(3). doi: 10.1016/j. jfineco.2004.07.004.
Chan, K., Ikenberry, D., & Lee, I. (2004). Economic sources of gain. Journal of Financial and Quantitative Analysis, 39(3).
DeAngelo, H., DeAngelo, L., & Stulz, R. (2006). Dividend policy and the earned/contributed capital mix: a test of the life-cycle theory. Journal of Financial Economics, 81(2). doi: 10.1016/j.jfineco.2005.07.005.
Duraj, A. N. (2002). Factors for the implementation of the dividend payment policy by public joint-stock companies. Lodz: Publisher of the University of Lodz.
Fisher, K. L., & Statman, M. (2000). Cognitive biases in market forecast. Journal of Portfolio Management, 27(1). doi: 10.3905/jpm.2000.319785.
Fuller, K., & Goldstein, M. (2011). Do dividends matter more in declining markets? Journal of Corporate Finance, 17(3). doi: 10.1016/j.jcorpfin. 2011.01.001.
Gajdka, J. (2013). Behavioural corporate finance. Lodz: Publisher of the Universi-ty of Lodz.
Ginglinger, E., & L'Her, J. F. (2006). Ownership structure and open market stock repurchases in France. European Journal of Finance, 12(1). doi: 10.1080/ 13518470500039543.
Grabiński, T., Wydmus, S., & Zeliaś, A. (1989), Methods of numerical taxonomy in modeling socio-economic phenomena. Warsaw: PWE.
Grullon, G., & Ikenberry, D. L. (2000). What do we know about stock repurchases. Journal of Applied Corporate Finance, 13(1). doi: 10.1111/j.1745-6622.2000. tb00040.x.
Holder, M., Langrehr, F., & Hexter L. (1998). Dividend policy determinants. An investigation of the influences of stakeholders theory. Financial Management, 27(3).
Hung, J. H., & Chen, Y. P. (2010). Equity undervaluation and signaling power of share repurchases with legal restrictions. Emerging Markets Finance & Trade, 46(2).
Jacob, M., & Jacob, M. (2013). Taxation, dividends, and share repurchases: taking evidence global. Journal of Financial & Quantitative Analysis, 48(4). doi: 10.1017/S0022109013000367.
Jensen, G. R., Solberg, D. P., & Zorn, T. S. (1992). Simultaneous determination of insider ownership, debt and dividend policies. Journal of Financial and Quan-titative Analysis, 27(2). doi: 10.2307/2331370.
Jerzemowska, M. (Ed.). (2004). Economic analysis in the company. Warsaw: PWE.
Jiang, Z., Kim, K. A., Lie, E., & Yang, S. (2013). Share repurchases, catering, and dividend substitution. Journal of Corporate Finance, 21. doi: 10.1016/j. jcorpfin.2013.01.004.
Kowerski, M. (2010). Influence of entrepreneurs and consumers' economic moods on dividends decisions of capital companies. Regional Barometer, 2(20).
Kulchania, M. (2016). Cost structure and payout policy. Financial Management, 45(4). doi: 10.1111/fima.12133.
La Porta, R., Lopez, F., Shleifer, A., & Vishny, R. (2000). Agency problems and dividend policies around the world. Journal of Finance, 55(1). doi: 10.1111/0022-1082.00199.
Li, W., & Lie, E. (2006). Dividend changes and catering incentives. Journal of Financial Economics, 80(2). doi: 10.1016/j.jfineco.2005.03.005.
Łuniewska, M., & Tarczyński, W. (2006). Methods of multidimensional compara-tive analysis on the capital market. Warsaw: WN PWN.
Notoria Serwis SA. EMIS. Retrived from:
login/login.html (5.12.2016). Retrived from: (10.12.2016).
Pieloch, A. (2012). Motives and effects of share buy-back. Lodz: Publisher of the University of Lodz.
Pieloch, A. (2013). Non-cash dividend as a tool of capital and ownership restruc-turing. In: R. Borowiecki, J. Chadam & J. Kaczmarek. (Eds.). Behaviors of en-terprises in the context of new economic challenges. Cracow: Foundation of the Cracow University of Economics.
Pieloch-Babiarz, A. (2017). Economic results and attractiveness of investing in shares of the companies paying dividend and conducting buy-backs. Economic Studies. Scientific Papers of University of Economics in Katowice, 322.
Stock Exchange Yearbooks (2006–2016). Retrieved from: biblioteka-gpw-lista?gpwlc_id=10 (10.12.2016).
Short, H., Zhang, H., & Keasey, K. (2002). The link between dividend policy and institutional ownership. Journal of Corporate Finance, 8(2). doi: 10.1016/ S0929-1199(01)00030-X.
Sierpińska, M. (1999). Dividend policy in capital companies. Warsaw-Cracow: WN PWN.
Szyszka, A. (2013). Behavioral finance and capital markets. New York: Palgrave Macmillan.
Tarczyński, W. (1994). A taxonomic measure of investment attractiveness of securities. Statistical Review, 3.
Wiemer, J., & Diel, S. (2008). Strategies for share buybacks. Journal of Corporate Treasury Management, 1(4).