The impacts of climate change on the dividend payout policy : study on Malaysian public listed plantation firms

The purpose of this study is to investigate the influences of climate change and firm characteristics on Malaysian plantation companies’ dividend payout policy. The sample of this paper took 33 agro firms listed in Bursa Malaysia with 462 firm-year observations over the period of 2003 to 2016. Using Robust Fixed Effects Model, the result of this paper indicates that El Nino positively and significantly influences dividend payout ratio, whereby flood is found to be insignificant positively in impacting Malaysian plantation companies’ dividend payout. Besides, firm size, liquidity and financial leverage of agro firms have positive linkage with dividend payout as well. However, profitability and growth opportunity are inversely related to dividend payout ratio. This research contributes to the literature based on the context of Malaysian plantation firms and delivers empirical evidence on the influences of climate change on financial adaptation of plantation firms, namely dividend payout. The findings of the study will be highly beneficial for capital market investors of agro-based companies through understanding about the adjustment of the climate change information in the stock market. The management of plantation companies will get an idea about the dividend need to pay related to the climatic events.