BEHAVIORAL PERSPECTIVES AMONG DIVIDEND POLICY AND ITS DETERMINANTS AND FIRM'S FINANCIAL PERFORMANCE: A CB-SEM APPROACH

Dividend policy is the prime concern for every shareholder. Financial managers formulate the necessary dividend policy that increases shareholders' affinity towards the company. This study examines the relationship between determinants of dividend policy (anticipated level of future earnings, stakeholders' interest, the pattern of past dividends, corporate social responsibility (CSR), and uncertainty) and financial performance. Moreover, this study empirically investigates the untapped mediating effect of dividend policy between determinants of dividend policy and financial performance. Financial managers are highly integrated into formulating dividend policy, the present study indulged with the behavioral responses taken from Chief financial officers (CFOs) of listed manufacturing firms of Pakistan. Questionnaires are used as a study tool. The population frame includes CFOs of different financial and non-financial sectors. From the Covariance-based Structural Equation Modelling (CB-SEM) analysis, results show a significant relationship between the determinants of dividend policy and financial performance. Further, dividend policy mediates the relationship between its determinants (except uncertainty and CSR) and the firm's financial performance. The practical implication would be recommended for financial managers and other corporate policymakers. Disciplinary: Management and Financial Sciences. (C) 2020 INT TRANS J ENG MANAG SCI TECH.