DETERMINANTS OF DIVIDEND POLICY – THE CASE OF FINANCIAL INSTITUTIONS OF THE REPUBLIC OF SERBIA

The decision on the dividend policy is one of the most important decisions that need to be made, and it may affect the future position and development of the company. A large number of authors conducted research that showed the influence of various factors on dividend policy. The results of that body of research showed different impacts, depending on the company on which the analysis was performed. The empirical analysis in this paper was performed on the case of financial institutions in the Republic of Serbia, and the basis for their selection was the importance of these institutions for the functioning of all segments of the economy. The subject of the paper is the dividend policy applied by financial institutions in the Republic of Serbia. In accordance with the subject of the research, the aim of the work is to determine the impact of profitability, liquidity, leverage, company size and dividends in the previous year on the current year’s dividend policy. A correlation analysis, panel regression analysis, and Mann-Whitney U test were performed, and the results of these analyses show the existence of a statistically significant negative impact of the the previous year’s dividend on the current year’s dividend policy, expressed by the dividend payout rate. The results of the non-parametric Mann-Whitney U test show the existence of a statistically significant difference in the distribution of the dividend policy variable between insurance companies and banks.