The fit of dividends on investment decisions in the Vietnam capital market

Trung Kim Quoc Nguyen

doi:10.15549/jeecar.v9i3.856

Authors

Trung Kim Quoc Nguyen The University of Finance - Marketing https://orcid.org/0000-0001-9756-6219

DOI:

https://doi.org/10.15549/jeecar.v9i3.856

Keywords:

Vietnam, Agency Theory, Asymmetric Information Theory, Dividends, Investment, 2SLS

Abstract

This paper explores the effect of dividends on the investment decisions of listed firms in Vietnam from 2010 to 2020. The study employs quantitative research methods to demonstrate a significant effect of dividends on investment decisions. In addition, the phenomena involving endogeneity, and over-identifying restrictions are tested to ensure the reliability of the findings. The dividend-investment relationship is explained based on some theories, including the bird-in-the-hand theory, the asymmetric information theory, and the agency theory. In particular, the study focuses on an emerging market under transparent information issues, as in Vietnam.

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