Catering Theory of Dividend Policy in Polish Listed Companies

Justyna Bogolebska
European Research Studies Journal, Volume XXVI, Issue 2, 197-208, 2023
DOI: 10.35808/ersj/3162


Purpose: The purpose of the article is to examine whether the catering theory is reflected in Polish listed companies in 2013-2020. Design/methodology/Approach: The study was conducted between 2013 and 2020. To verify the hypotheses, financial data was obtained from the Thompson Reuters database. The aim of the study was to verify whether the catering theory is applicable to Polish listed companies. Accordingly, it was assumed that decisions to pay dividends to shareholders are made in companies valued higher by the market (dividend-paying companies). The measure of valuation of the two groups of companies (group 1 - dividend-paying companies, group 2 - non-dividend-paying companies) was the MV / BV ratio according to the adopted Baker's methodology. The valuation of dividend-paying companies was set against non-dividend-paying companies. Findings: In view of the research conducted, it should be concluded that the catering theory is justified for the Polish listed company market. Practical Implications: The article examines the significance of the catering theory of dividend policy and investigates whether it can be discussed in the context of Polish listed companies. Originality/Value: The article undertakes a discussion in the area of dividend policy and one of the theories catering theory in dividend policy.

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