Determinants of dividend policy in the Netherlands

This study examines the determinants of dividend policy of 65 Dutch firms listed on the Euronext Amsterdam from 2016 to 2019. This study contributes to solving a piece of the dividend puzzle in a Dutch setting. Both the probability as well as the intensity of paying dividends are investigated. This study finds that there are different determinants for the probability of paying a dividend and for the payout intensity. Overall, the results show that, compared to non-dividend payers, dividend paying Dutch companies are more profitable, have a lower ownership concentration and are larger in size. Additionally, the dividend paying Dutch companies who payout a larger amount of dividend relative to their total assets, have a higher profitability, ownership concentration and growth/investment opportunities, and have lower levels of free cash flow and debt ratios compared to Dutch companies who payout lower levels of dividend relative to their total assets.