Share Repurchase and Cash Dividend Payout Policy in Vietnamese Stock Market : Substitute or Complement?

This research aims to investigate the relationship between share repurchase and cash dividend payout, the popular cash distribution methods applied by Vietnamese listed firms. The empirical results show that there is a nonlinear relationship between the change in dividend and the repurchase yield. In addition, a significantly positive correlation reveals the dominant of complementary effect in the whole sample. The results are consistent in robustness tests. The quantile regression was employed to analyze the nonlinear relationship between share repurchase and cash dividend. Empirical results indicate that the substitute or complementary relationship varies with the scale of share repurchase yield. The higher the share repurchase yield, the more significant the substitution effect is. Furthermore, the Vietnamese listed firms seem to more carefully take their future growth into consideration regarding share repurchase activities. However, the signaling and free cashflow hypotheses show marginally significances