How Do Dynamic Financing Decisions Explain the Behavior of Dividend Payout Policies? An Empirical Study of Listed Manufacturing Pakistani Firms

The study investigates the factors that influence dividend payout policy in public manufacturing Pakistani companies throughout the timeframe 2010-20. Pooled OLS technique was used for regression purpose, as the majority of companies does not pay a dividend at all or regularly so all these firms or not paying observations were excluded from the final dataset. The study discovers that dividend payout in listed manufacturing Pakistani firms is significantly affected by “ratio of short-debt”, “ratio of long-debt”, “ratio of total-debt”, “life cycle ratio” and “cash ratio”. Similarly, “short term debt ratio”, “ratio of long-debt” and “life cycle ratio”, increase the dividend payout while “cash ratio”, decreases the dividend distribution ratio for publically traded manufacturing Pakistani companies. The policymakers/financial advisors and decision-makers in listed manufacturing Pakistani firms should take into consideration the factors like debt financing, life cycle ratio, and cash ratio for making their dividend policies