Dividend behavior of industrial companies: Sample selection bias revisited

Abstract

This paper aims to analyze the dividend decisions of industrial companies whose shares were traded in Borsa Istanbul between 2010 and 2019 with Heckman's two-step approach. In many countries like Turkey, official regulations state that equity companies have to take corporate dividend decisions with a two-stage process (whether or not to pay the dividend and dividend amount). Our study differs from previous studies because this is the first study analyzed the Borsa Istanbul sample with the Heckman model for understanding this two-stage dividend decision and averting potential sample selection bias. Results imply firm features influence the two steps of dividend decisions differently.