Dividend policies of shariah-compliant and non-shariah-compliant firms: Evidence from the MENA region

Omar Farooq, Oumkeltoum Tbeur

    Research output: Contribution to journalJournal articleResearchpeer-review

    Abstract

    Do shariah-compliant firms pay higher dividends than other firms? Using data from the MENA (Morocco, Egypt, Saudi Arabia, United Arab Emirates, Jordan, Kuwait, and Bahrain) region, this paper shows that shariah-compliant firms not only have higher payout ratios but also have higher likelihood to pay dividends than non-shariah-compliant firms during the period between 2005 and 2009. We argue that financial characteristics of shariah-compliant firms (i.e. low leverage, low account receivables, and low cash) are such that they pay higher dividends than their non-shariah-compliant counterparts. Furthermore, we also show that our results hold true in both legal regimes - the civil law countries and the common law countries.
    Original languageEnglish
    JournalInternational Journal of Economics and Business Research
    Volume6
    Issue number2
    Pages (from-to)158-172
    ISSN1756-9850
    DOIs
    Publication statusPublished - 2013

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