We extend the Maquieira and Danús (1998) study. In doing so, we use the model proposed by Rozeff (1982) to determine dividend payments. This model considers two opposites factors which may explain the dividend payout policy- transaction costs and agency costs. We do a cross sectional analysis on a sample of fifty four Chilean public companies in the Santiago Stock Exchange during the period 1996-2002. We find that dividends signal future growth of the companies. Furthermore, the greater the percentage of shares owned by insiders the higher the dividend payout. Finally, we find that the past growth rate of the companies is negatively associated with the dividend payments.
Maquieira V., C., & Moncayo M., I. (2004). Agency Costs and Transaction Costs as Determinants of the Dividend Payment Rate in Chile: Extension. Estudios De Administración, 11(2), 1–26. https://doi.org/10.5354/0719-0816.2004.56799
