The influence of ESG on dividend policy in companies in Indonesia
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Published:
Feb 28, 2024
Keywords:
Company Size, Dividend Policy, ESG, Leverage
Section
Economy
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Abstract
This research aims to examine the influence of Environmental, Social, and Governance (ESG) disclosure on Dividend Policy. The population in this study consists of all companies listed on the Bursa Efek Indonesia from 2017-2021. The variabel used in this research are Dividend Policy as a dependent variable; Environmental, Social, and Governance as independent variable; and company size and levrage as control variable. The sampling technique employed is purposive sampling, resulting in a total of 130 data samples. The analysis methods used include classical assumption tests, multiple linear regression, and hypothesis testing. The research finding indicate that Environmental, Social, and Governance have a positive influence on Dividend Policy. The control variable, Company Size, have a positive impact on Dividend Policy, while Leverage has a negative effect on Dividend Policy.
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How to Cite
Filman, F. A. . and Rahmayanti, D. . (2024) “The influence of ESG on dividend policy in companies in Indonesia ”, Jurnal Mantik, 7(4), pp. 3664-3674. doi: 10.35335/mantik.v7i4.4819.
References
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Bilyay-Erdogan, S., Danisman, G. O., & Demir, E. (2023). ESG performance and dividend payout: A channel analysis. Finance Research Letters, 55. https://doi.org/10.1016/j.frl.2023.103827
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Dewasiri, N. J., Yatiwelle Koralalage, W. B., Abdul Azeez, A., Jayarathne, P. G. S. A., Kuruppuarachchi, D., & Weerasinghe, V. A. (2019). Determinants of dividend policy: evidence from an emerging and developing market. Managerial Finance, 45(3), 413–429. https://doi.org/10.1108/MF-09-2017-0331
Djumahir. (2009). Pengaruh Biaya Agensi, Tahap Daur Hidup Perusahaan, dan Regulasi terhadap Kebijakan Dividen pada Perusahaan Manufaktur di Bursa Efek Indonesia. Jurnal Manajemen Dan Kewirausahaan, 11(2), 144–153.
Farooque, O. Al, Hamid, A., & Sun, L. (2021). Does Corporate Governance Have a Say on Dividends in Australian Listed Companies? Australasian Accounting, Business and Finance Journal, 15(4), 47–75.
Fatemian, F., & Hooshyarzadeh, M. (2016). Role of dividend policy determinants in multinational and domestic companies, evidence from Iran. Problems and Perspectives in Management, 14(3), 332–340. https://doi.org/10.21511/ppm.14(3-si).2016.05
Hamill, P. A., & Al-Shattarat, W. (2012). What Determines the Dividend Payout Ratio for Jordanian Industrial Firms? Journal of Emerging Market Finance, 11(2), 161–188. https://doi.org/10.1177/0972652712454515
Jensen, M. C., & Meckling, W. H. (1976). THEORY OF THE FIRM: MANAGERIAL BEHAVIOR, AGENCY COSTS AND OWNERSHIP STRUCTURE. Journal of Financial Economics, 3, 305–360.
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Kim, S., & Li, Z. (2021). Understanding the impact of esg practices in corporate finance. Sustainability (Switzerland), 13(7). https://doi.org/10.3390/su13073746
Matos, P. V., Barros, V., & Sarmento, J. M. (2020). Does esg affect the stability of dividend policies in Europe? Sustainability (Switzerland), 12(21), 1–15. https://doi.org/10.3390/su12218804
Matuszewska-Pierzynka, A., Mrzyg?ód, U., & Pieloch-Babiarz, A. (2023). ESG performance and dividend stability of the world’s largest enterprises. Journal of Entrepreneurship, Management and Innovation, 19(4), 184–217. https://doi.org/10.7341/20231946
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Putra, R. N., Sastrodiarjo, I., & Mukti, A. H. (2023). PENGARUH PENGUNGKAPAN ENVIRONMENTAL, SOCIAL, GOVERNANCETERHADAP DIVIDENDPAYOUTPOLICYDENGAN KUALITAS AUDIT SEBAGAI VARIABEL PEMODERASI (Studi Empiris pada Perusahaan Sektor Consumer Non-Cyclicalsyang terdaftar di Bursa Efek Indonesia). Mufakat: Jurnal Ekonomi, Manajemen Dan Akuntansi, 2(3), 311–318. Retrieved from http://jurnal.anfa.co.id/index.php/mufakat
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Triyani, A., Setyahuni, & Whini, S. (2020). PENGARUH KARAKTERISTIK CEO TERHADAP PENGUNGKAPAN INFORMASI ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG). JURNAL EKONOMI DAN BISNIS, 21(2), 72–83.
Wahjudi, E. (2020). Factors affecting dividend policy in manufacturing companies in Indonesia Stock Exchange. Journal of Management Development, 39(1), 4–17. https://doi.org/10.1108/JMD-07-2018-0211
Wu, J., Wang, D., Fu, X., & Meng, W. (2023). Antecedent Configurations of ESG Disclosure: Evidence from the Banking Sector in China. Sustainability (Switzerland), 15(17). https://doi.org/10.3390/su151713234
Yoo, S., & Managi, S. (2022). Disclosure or action: Evaluating ESG behavior towards financial performance. Finance Research Letters, 44. https://doi.org/10.1016/j.frl.2021.102108
Zahid, R. M. A., Taran, A., Khan, M. K., & Chersan, I. C. (2023). ESG, dividend payout policy and the moderating role of audit quality: Empirical evidence from Western Europe. Borsa Istanbul Review, 23(2), 350–367. https://doi.org/10.1016/j.bir.2022.10.012
Bhattacharya, S. (1979). Imperfect Information, Dividend Policy, and “The Bird in the Hand” Fallacy. In Source: The Bell Journal of Economics (Vol. 10).
Bhattacharyya, N. (2007). Dividend policy: a review. Managerial Finance, 33(1), 4–13. https://doi.org/10.1108/03074350710715773
Bilyay-Erdogan, S., Danisman, G. O., & Demir, E. (2023). ESG performance and dividend payout: A channel analysis. Finance Research Letters, 55. https://doi.org/10.1016/j.frl.2023.103827
Boffo, R., & Patalano, R. (2020). ESG Investing: Practices, Progress and Challenges. Paris.
Dewasiri, N. J., Yatiwelle Koralalage, W. B., Abdul Azeez, A., Jayarathne, P. G. S. A., Kuruppuarachchi, D., & Weerasinghe, V. A. (2019). Determinants of dividend policy: evidence from an emerging and developing market. Managerial Finance, 45(3), 413–429. https://doi.org/10.1108/MF-09-2017-0331
Djumahir. (2009). Pengaruh Biaya Agensi, Tahap Daur Hidup Perusahaan, dan Regulasi terhadap Kebijakan Dividen pada Perusahaan Manufaktur di Bursa Efek Indonesia. Jurnal Manajemen Dan Kewirausahaan, 11(2), 144–153.
Farooque, O. Al, Hamid, A., & Sun, L. (2021). Does Corporate Governance Have a Say on Dividends in Australian Listed Companies? Australasian Accounting, Business and Finance Journal, 15(4), 47–75.
Fatemian, F., & Hooshyarzadeh, M. (2016). Role of dividend policy determinants in multinational and domestic companies, evidence from Iran. Problems and Perspectives in Management, 14(3), 332–340. https://doi.org/10.21511/ppm.14(3-si).2016.05
Hamill, P. A., & Al-Shattarat, W. (2012). What Determines the Dividend Payout Ratio for Jordanian Industrial Firms? Journal of Emerging Market Finance, 11(2), 161–188. https://doi.org/10.1177/0972652712454515
Jensen, M. C., & Meckling, W. H. (1976). THEORY OF THE FIRM: MANAGERIAL BEHAVIOR, AGENCY COSTS AND OWNERSHIP STRUCTURE. Journal of Financial Economics, 3, 305–360.
Khan, M., Serafeim, G., & Yoon, A. (2016, November 1). Corporate sustainability: First evidence on materiality. Accounting Review, Vol. 91, pp. 1697–1724. American Accounting Association. https://doi.org/10.2308/accr-51383
Kim, S., & Li, Z. (2021). Understanding the impact of esg practices in corporate finance. Sustainability (Switzerland), 13(7). https://doi.org/10.3390/su13073746
Matos, P. V., Barros, V., & Sarmento, J. M. (2020). Does esg affect the stability of dividend policies in Europe? Sustainability (Switzerland), 12(21), 1–15. https://doi.org/10.3390/su12218804
Matuszewska-Pierzynka, A., Mrzyg?ód, U., & Pieloch-Babiarz, A. (2023). ESG performance and dividend stability of the world’s largest enterprises. Journal of Entrepreneurship, Management and Innovation, 19(4), 184–217. https://doi.org/10.7341/20231946
Nasdag. (2019). ESG Reporting Guide 2.0 A Support Resource for Companies.
Putra, R. N., Sastrodiarjo, I., & Mukti, A. H. (2023). PENGARUH PENGUNGKAPAN ENVIRONMENTAL, SOCIAL, GOVERNANCETERHADAP DIVIDENDPAYOUTPOLICYDENGAN KUALITAS AUDIT SEBAGAI VARIABEL PEMODERASI (Studi Empiris pada Perusahaan Sektor Consumer Non-Cyclicalsyang terdaftar di Bursa Efek Indonesia). Mufakat: Jurnal Ekonomi, Manajemen Dan Akuntansi, 2(3), 311–318. Retrieved from http://jurnal.anfa.co.id/index.php/mufakat
Ruan, L., & Liu, H. (2021). Environmental, social, governance activities and firm performance: evidence from China. Sustainability (Switzerland), 13(2), 1–16. https://doi.org/10.3390/su13020767
Saldi, I., Awwalin, W., Adrianto, F., & Hamidi, M. (2023). ESG AND DIVIDEND POLICY IN INDONESIA. Journal Of Social Research, 2(3), 724–734. Retrieved from http://ijsr.internationaljournallabs.com/index.php/ijsr
The Global Compact. (2004). Who Cares Wins: Connecting Financial Markets to a Changing World Connecting Financial Markets to a Changing World.
Triyani, A., Setyahuni, & Whini, S. (2020). PENGARUH KARAKTERISTIK CEO TERHADAP PENGUNGKAPAN INFORMASI ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG). JURNAL EKONOMI DAN BISNIS, 21(2), 72–83.
Wahjudi, E. (2020). Factors affecting dividend policy in manufacturing companies in Indonesia Stock Exchange. Journal of Management Development, 39(1), 4–17. https://doi.org/10.1108/JMD-07-2018-0211
Wu, J., Wang, D., Fu, X., & Meng, W. (2023). Antecedent Configurations of ESG Disclosure: Evidence from the Banking Sector in China. Sustainability (Switzerland), 15(17). https://doi.org/10.3390/su151713234
Yoo, S., & Managi, S. (2022). Disclosure or action: Evaluating ESG behavior towards financial performance. Finance Research Letters, 44. https://doi.org/10.1016/j.frl.2021.102108
Zahid, R. M. A., Taran, A., Khan, M. K., & Chersan, I. C. (2023). ESG, dividend payout policy and the moderating role of audit quality: Empirical evidence from Western Europe. Borsa Istanbul Review, 23(2), 350–367. https://doi.org/10.1016/j.bir.2022.10.012
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