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Dividend policies in Australia and Japan.

This paper presents the finding of a comparative study of dividend policies in Australia and Japan. These two countries are the most developed in the Asia Pacific region, but are different in their cultural, financial, legal, and political environments. Their accounting systems are two ends of a spectrum [Nobes, 1983] in which Australia follows the judgemental and professional approach of the British-American model and Japan follows the prescriptive and law-based approach of the Continental model. This paper examines panel data from the constituent stocks of the ASX 200 Index of the Australian stock market and the Nikkei 225 Index of the Japanese stock market. The evidence that Australia, with an imputation tax system which favors dividends over capital gains, has a significantly higher dividend payout than Japan lends support to the influence of environment on dividend policy. Dividend policies in Australia and Japan are affected by different financial factors. Fixed effects regression models indicate that dividend policies are affected positively by size in Australia and liquidity in Japan, and negatively by risk in Japan only. An industry effect is also found to be significant in both Australia and Japan. (JEL G30, 050)


Hong Kong Institute of Education--Hong Kong

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Title Annotation:Research Notes
Comment:Dividend policies in Australia and Japan.(Research Notes)
Author:Ho, Horace
Publication:International Advances in Economic Research
Article Type:Brief Article
Geographic Code:9HONG
Date:Aug 1, 2003
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