The Impact of Financial Performance Toward Dividend Policy in the Indonesian Banking Subsector Moderated by Managerial Ownership
Keywords:
Banking, Managerial Ownership, Dividend Policy, Financial Performance, Firm Size, Banking SubsectorAbstract
This study aims to provide empirical evidence regarding the influences of financial performance such as profitability, liquidity, leverage, free cash flow, company size and managerial ownership. A total of 47 banking sub-sector companies listed on the IDX for the period 2019-2023 were used as samples in the study. Quantitative methods were used in this study by utilizing Stata software in processing statistical data. The results of the study show that while profitability, liquidity and free cash flow (FCF) have a positive effect on dividend policy, leverage has no effect on dividend policy in banking sub-sector companies in Indonesia. The study has shown that managerial ownership does not moderate the positive influence of profitability, leverage and FCF, but managerial ownership moderates the influence of liquidity on dividend policy in banking sub-sector companies in Indonesia. The results of this study provide both theoretical and practical implications. Theoretical implications provide an empirical support for agency theory. Practical implications provide insights into the relationship between management's financial performance and the strategic formulation of dividend policies that management and company owners as parties in banking companies can produce more informed decisions and enhance corporate governance.
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