The Effect of Product Market on Dividend Policy and Firms' Dividends

The present research is conducted to study the effect of product market power on dividend policy and firms’ dividends. In this regard, 83 firms were selected from 2011-2016. Lerner adjusted index was used as a measure of market power; next, the effect on the dividend policy and dividend was examined once the effect of control variables (firm size, profitability, growth opportunities, and firm retained earnings) is observed. Research data were analyzed using data paneling and corresponding tests. Research hypotheses were tested using logistic regression for the first research model, and using multivariate linear regression statistical analyses including Chow test, Hausman test, for the second research model, through Eviews9. Research results show that there is a positive significant relationship between market power and firms dividend policy at the probability 95%. In addition, there is also seen a significant relationship between market power and dividend.