The Impact of Dividend Policy on Large Private Algerian Firms’ Performance

Abstract

This research investigates the impact of dividend policy on the performance of large private Algerian firms. The study is based on a panel data comprising 61 firms observed over the period 2019 to 2023, totaling 305 firm-year observations. To explore the relationship between dividend policy and firm performance, we employ panel data regression techniques that account for both cross-sectional and temporal variations. Firm performance is measured using the Return on Assets (ROA) ratio, while dividend policy is represented by the dividend payout ratio (DPR), both of which are widely utilized indicators in financial research. The model also includes a set of control variables, including liquidity, leverage, asset tangibility, and firm size. The findings reveal that dividend policy has a significant and positive impact on firm performance, suggesting that firms distributing dividends tend to achieve higher performance levels. Additionally, liquidity and firm size are found to have a positive influence on performance, whereas asset tangibility and leverage exhibit a negative relationship