Title : Tax Rebate and Dividend Payout in Bangladesh

Authors : Sharif Ahkam, Shahzada Imran, Syeda Hossain

Abstract : The purpose of this paper is to examine the effects of the introduction of 20% tax rebate in 2002 for certain firms on the dividend policy of firms potentially qualifying for this rebate in Bangladesh. A balanced panel data set of 63 non-financial firms of Bangladesh for 14 (1998-2011) years from the Dhaka Stock Exchange is used for this purpose. Newey-West estimator is used to estimate a logit model and the specified model uses binary values of 0 and 1 to identify if it met the tax rebate threshold. The explanatory variables are firm size, log of market value to face value ratio and profitability. A dummy variable was used to separate the pre-rebate period (2003 and before) from post-rebate period (after 2003). The dummy variable turned out to be insignificant indicating that introduction of the tax rebate had no impact on dividend policy of qualifying firms.

Journal : China-USA Business Review Volume : 13 Year : 2014 Issue : 9
Pages : 555-563 City : Edition : Editors :
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