Determinants of Dividend Policy: A Case of Serbia’s Banking Sector

Biljana Jovković, Aleksandra S. Vasić, Jasmina Bogićević


Dividend policy is one of the most controversial areas of corporate finance.
The paper presents the results of the research in the banking sector of the
Republic of Serbia. The specific characteristics of the financial sector make
the research on dividend policy determinants additionally complex. This
study aims to determine the factors of dividend policy in the Serbian banking
sector in the period 2009–2018. The model of random effects was chosen
to test the relationship between dividend determinants and dividend
payout. Empirical results show that previous years’ dividends have a significant
positive effect on dividend policy. Individual investors can benefit from
the research to a great extent, as well as bank managers, when creating
dividend policies that would contribute to maximising profit and satisfying
the needs of employees and shareholders in the long run.


corporate finance, banking sector, dividend policy, dividend payout, Serbia

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