Dividend Puzzle: Global Evidence in Oil & Gas

Abstract

This study examines factors influencing dividend policy in the Oil & Gas (O&G) industry, specifically exploring differences among sectors. Altogether 203 O&G independent companies were studied during the period 2000–2022. Through a data panel, the statistical methods used cover Ordinary Least Squares (OLS), random effect, logit, and probit. The analysis by sectors, as well as the consideration of market shocks, provide more information. The results show that Brent oil price significantly impacts dividend policy. Moreover, it can be seen how market shock favors the dividend payout. Variables such as leverage, liquidity, or profitability are also significant factors. Companies that are in different sectors differ in their dividend policy and its factors. With a global sample, a long period, and variables not previously tested in the literature, this paper tries to provide novel conclusions that allow us to know in greater depth the dividend policy of the O&G industry. Understanding dividend policy is essential for investors and executives to make investment decisions. The results suggest that O&G independent companies should be studied separately. This opens the door to future research venues.