The Role of Profitability on Dividend Policy in Property and Real Estate Registered Subsector Company in Indonesia

Andri Panahatan Siahaan, Djoko Hanantijo


Nowadays, the company's dividend payout policy is the subject of much analysis and debate among financial practitioners. In the business phenomenon that occurs, there are several factors influence the company in carrying out its dividend policy, including financial performance. The company's financial performance reflected in financial ratios, such as leverage and firm size. The purpose of this study was to determine the role of profitability on dividend policy in listed property and real estate sub-sector companies in Indonesia for the period 2012 - 2019.  Furthermore, the focus of this study is to examine profitability in mediating the effect of leverage and firm size on company dividend policy. The research method in this study uses a quantitative approach. The data were processed and analyzed statistically using Eviews v.10 software. The main results in this study reveal that profitability mediates the effect of leverage and firm size on dividend policy positively and significantly. Contribution of the results of this study to company management as input for developing dividend policies to safeguard shareholders' wealth by considering the company's profits and the benefits of investing for shareholders.


Dividend Policy, Firm Size, Leverage, Profitability.

Full Text:



S. M. A. Parvez, A. S. M. Sarwar, R. Hoq, and M. R. Chowdhury, “Capital Market : Opportunities and Challenges,” Sch. J. Econ. , Bus. Manag., no. February, 2017.

A. Mehta, “An Empirical Analysis of Determinants of Dividend Policy - Evidence from the UAE Companies,” Glob. Rev. Account. Financ., vol. 3, no. 1, pp. 18–31, 2012.

F. Malik, S. Gul, M. Khan, and S. Rehman, “Factors influencing corporate dividend payout decisions of financial and non-financial firms,” Res. J. Financ. Account., vol. 4, no. 1, pp. 35–47, 2013.

S. A. Hashemi and F. Z. K. Zadeh, “The Impact of Financial Leverage Operating Cash Flow and Size of Company on The Dividend Policy ( Case study of Iran ),” Interdiscip. J. Contemp. Res. Bus., vol. 3, no. 2009, pp. 264–270, 2012.

F. Hossain, R. Sheikh, and S. M. Akterujjaman, “Impact of Firm Specific Factors on Cash Dividend Payment Decisions: Evidence from Bangladesh,” Int. Rev. Bus. Res. Pap., vol. 10, no. 2, pp. 62–80, 2014.

S. O. Kajola, A. A. Desu, and T. F. Agbanike, “Factors Influencing Dividend Payout Policy Decisions of Nigerian Listed Firms,” Int. J. Econ. Commer. Manag., vol. 3, no. 6, pp. 539–557, 2015.

R. Nerviana, “The Effect of Financial ratios and Company size on Dividend policy,” Indones. Account. Rev., vol. 5, no. 1, p. 23, 2016.

G. N. Ahmad and V. K. Wardani, “The Effect of Fundamental Factor To Dividend Policy: Evidence in Indonesia Stock Exchange,” Int. J. Bus. Commer., vol. 4, no. 02, pp. 14–25, 2014.

I. Jabbouri, “Determinants of corporate dividend policy in emerging markets: Evidence from MENA stock markets,” Res. Int. Bus. Financ., vol. 37, pp. 283–298, 2016.

E. Marfo-Yiadom and S. K. Agyei, “Determinants of dividend policy of banks in Ghana,” Int. Res. J. Financ. Econ., vol. 61, no. January 2011, pp. 99–108, 2011.

A. N. Odum and C. G. Odum, “International Digital Organization for Scientific Research IDOSR,” Idosr J. Sci. Technol., vol. 3, no. 1, pp. 37–46, 2018.

B. L. Connelly, S. T. Certo, R. D. Ireland, and C. R. Reutzel, “Signaling Theory: A Review and Assessment,” J. Manage., vol. 37, no. 1, pp. 39–67, 2011.

M. Asad and S. Yousaf, “Impact of Leverage on Dividend Payment Behavior of Pakistani Manufacturing Firms,” Int. J. Innov. Appl. Stud., vol. 6, no. 2, pp. 216–221, 2014.

B. K. Baah, “Industry Sector Determinants of Dividend Policy and Its Effect on Share Price in Ghana,” Int. J. Econ. Bus. Financ., vol. 2, no. 5, pp. 1–19, 2014.

O. Finingsih, S. Nurlaela, and K. H. Titisari, “The Influence of Profitability , Liquidity , Leverage , and Company Abstract :,” vol. 2018, no. 2017, pp. 427–437, 2018.

D. Kartikasari and M. Merianti, “The effect of leverage and firm size to profitability of public manufacturing companies in Indonesia,” Int. J. Econ. Financ. Issues, vol. 6, no. 2, pp. 409–413, 2016.

A. Singapurwoko and M. S. M. El-Wahid, “The impact of financial leverage to profitability study of non-financial companies listed in Indonesia stock exchange,” Eur. J. Econ. Financ. Adm. Sci., vol. 32, no. 32, pp. 136–148, 2011.

E. Aydın Unal, Y. Unal, and O. Isık, “the Effect of Firm Size on Profitability: Evidence From Turkish Manufacturing Sector,” Pressacademia, vol. 6, no. 4, pp. 301–308, 2017.

P. Komrattanapanya and P. Suntraruk, “Factors Influencing Dividend Payout in Thailand: A Tobit Regression Analysis,” Int. J. Account. Financ. Report., vol. 3, no. 2, p. 255, 2014.

P. O. Ihejirika and P. C. Nwakanma, “An Empirical Analysis of the Propensity to Pay or Not to Pay Dividends : A Test of the Life Cycle Theory with Nigerian Data,” Oman Chapter Arab. J. Bus. Manag. Rev., vol. 1, no. 12, pp. 74–87, 2012.

J. W. Creswell and J. D. Creswell, Research Design, 5 th Editi. London, United Kingdom: SAGE Publication, Inc, 2017.

B. Shyti and D. Valera, “The Regression Model for the Statistical Analysis of Albanian Economy,” Int. J. Math. Trends Technol., vol. 62, no. 2, pp. 90–96, 2018.


  • There are currently no refbacks.

Copyright (c) 2020 Andri Panahatan Siahaan

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.