The solution to overcome the disappearing dividend phenomenon: Learning from the experience of the Indonesia Stock Exchange

Figures & data

Figure 1. Logit model research paradigm

Source: Literature review and previous research.

Table 1. Issuer selection criteria

No.	Issuer selection criteria	Number of issuers that fulfill criteria
1	All companies listed on the Indonesia Stock Exchange in 2012, which announced dividend decisions (cash/stock/mixed) or did not pay.	459
2	Companies listed on the Indonesia Stock Exchange from 2005 to 2012 that announced dividend decisions (cash, stock, or mixed) or those that did not pay, were not Bank and Non-Bank Financial Institutions and their equity was not negative.	227
3	The company did not take any corporate action or other announcements around the date of the dividend announcement (declaration date).	226
4	Companies that have complete data on variables that are the object of research.	204

Source: IDX Secondary Data Processed, 2012.

Table 2. Number of research samples and percentages for each industry on the IDX

No:	Industry	Number of issuers	Percentage of total amounts of issuers
1	Agriculture, forestry, and fishing	9	4%
2	Mining	15	7%
3	Basic industry and chemicals	39	19%
4	Miscellaneous industry	26	13%
5	Consumer goods industry	25	12%
6	The property, real estate, and building construction	25	12%
7	Infrastructure, utilitiesand transportation	12	6%
8	Trade, services and investment	53	26%
Total		204	100%

Source: Data processed from IDX Statistics (2013).

Table 3. BEI issuers paying dividends: cash, stock, mixed, and not paying by sector in 2005–2012

		2005–2012
		Cash	Stock	Mixed	No dividend
No.	Industry
1	Agriculture	38	0	0	34
		2%	2%	2%	2%
2	Mining	56	0	1	63
		3%	0%	0%	4%
3	Basic industry and chemicals	142	2	9	159
		9%	0%	1%	10%
4	Miscellaneous industry	102	1	6	99
		6%	0%	0%	6%
5	Consumer goods industry	111	0	2	87
		7%	0%	0%	5%
6	Property and real estate	53	3	8	136
		3%	0%	0%	8%
7	Infrastructure and transportation	48	1	2	36
		3%	0%	0%	2%
8	Trade, services and investment	190	5	10	219
		12%	0%	1%	13%
Total		740	12	38	842
		45%	1%	2%	52%

Table 4. Pearson correlations—2005–2012

	ncs	mc	eps	der	per	cr
ncs	1
mc	.33	1
eps	−.03	.11	1
der	−.01	−.01	−.01	1
per	.00	−.01	−.01	−. 00	1
cr	−.02	−.03	−.01	−.01	−.01	1

Source: IDX, data processed.

ncs = number of common stockholders.

per = price earnings ratio.

mc = market capitalization.

cr = current ratio.

eps = earnings per share.

der = debt-to-equity ratio.

dcri = dummy crisis; = 1 if the year of the global financial crisis and 0 others.

Table 5. Multinomial logit results for testing the effect of issuer characteristics on probability of choosing cash dividend, stock dividend, mixed dividend decisions versus choosing a non-pay dividend decision. Period 2005–2012

Dep.Var:	Model 1a: cash dividend decision				Model 1b: stock dividend decision				Model 1 c: mixed dividend decision
	Co efficient	Prob.	Odds ratio		Co efficient	Prob.	Odds ratio		Co efficient	Prob.	Odds ratio
Ind.Var.			Value	% Influence			Value	% Influence			Value	% Influence
Intercept	−5.75	0.00			−25.47	0.00			−9.53	0.00
lnncs	−0.16	0.00*	0.85	−14.90	−0.51	0.02**	0.60	−40.03	−0.34	0.01*	0.71	−28.92
lnmc	0.47	0.00*	1.60	59.63	0.56	0.00*	1.75	75.43	0.52	0.00*	1.68	68.42
eps	0.004	0.00*	1.004	0.377	−0.001	0.63	0.999	−0.132	0.004	0.00*	1.004	0.370
der	−0.07	0.01*	0.93	−6.88	−0.02	0.85	0.98	−1.79	−0.10	0.05**	0.90	−9.62
per	−0.001	0.01*	0.999	−0.128	−0.001	0.63	0.999	−0.083	−0.001	0.35	0.999	−0.122
cr	−0.03	0.01*	0.97	−3.11	0.01	0.81	1.01	0.52	−0.09	0.25	0.91	−8.65
dcri	0.29	0.12	1.33	33.24	17.19	0.00*	2.93	193.00	1.76	0.09***	5.83	483.22
Pseudo R-square							Simultaneous-test
Cox and Snell 0,298				0.298			Prob. (LR-statistic) 0.000
Nagelgerke 0.370
McFadden 0.215
Goodness-of-fit							Classification accuracy rate
Prob. (Deviance) 1.000							Overall Percentage (Percent Correct) 71.0%

Source: IDX,KSEI 2012–2015, data processed.

Notes: *, **, ***, significant at 1%, 5% and 10%, respectively.