Characteristics of the board of directors and dividend policy: A case study of banks in Western Balkans

Milašino ić, Ma ko; Radoje ić, Aleksand a; Jo ko ić, Biljana A icle Cha ac e is ics o he boa d o di ec o s and di idend policy: A case s udy o banks in Wes e n Balkans Naše gospoda s o / Ou Economy P o ided in Coope a ion wi h: Facul y o Economics and Business, Uni e si y o Ma ibo Sugges ed Ci a ion: Milašino ić, Ma ko; Radoje ić, Aleksand a; Jo ko ić, Biljana (2023) : Cha ac e is ics o he boa d o di ec o s and di idend policy: A case s udy o banks in Wes e n Balkans, Naše gospoda s o / Ou Economy, ISSN 2385-8052, Sciendo, Wa saw, Vol. 69, Iss. 1, pp. 10-18, h ps://doi.o g/10.2478/ngoe-2023-0002 This Ve sion is a ailable a : h ps://hdl.handle.ne /10419/290535 S anda d-Nu zungsbedingungen: Die Dokumen e au EconS o dü en zu eigenen wissenscha lichen Zwecken und zum P i a geb auch gespeiche und kopie we den. Sie dü en die Dokumen e nich ü ö en liche ode komme zielle Zwecke e iel äl igen, ö en lich auss ellen, ö en lich zugänglich machen, e eiben ode ande wei ig nu zen. So e n die Ve asse die Dokumen e un e Open-Con en -Lizenzen (insbesonde e CC-Lizenzen) zu Ve ügung ges ell haben soll en, gel en abweichend on diesen Nu zungsbedingungen die in de do genann en Lizenz gewäh en Nu zungs ech e. Te ms o use: Documen s in EconS o may be sa ed and copied o you pe sonal and schola ly pu poses. You a e no o copy documen s o public o comme cial pu poses, o exhibi he documen s publicly, o make hem publicly a ailable on he in e ne , o o dis ibu e o o he wise use he documen s in public. I he documen s ha e been made a ailable unde an Open Con en Licence (especially C ea i e Commons Licences), you may exe cise u he usage igh s as speci ied in he indica ed licence. h ps://c ea i ecommons.o g/licenses/by-nc-nd/4.0/ 10 NAŠE GOSPODARSTVO / OUR ECONOMY 69 (1) 2023Milašino ić, M., Radoje ić, A., Jo ko ić, B. Cha ac e is ics o he Boa d o Di ec o s and Di idend Policy: A Case S udy o Banks in Wes e n Balkans Ma ko Milašino ića*, Aleksand a Radoje ićb, Biljana Jo ko ićb aUni e si y o K aguje ac, Facul y o Ho el Managemen and Tou ism V njačka Banja, Voj ođanska 5a, 36210 V njačka Banja, Se bia bUni e si y o K aguje ac, Facul y o Economics, Liceja Kneže ine S bije 3, 34000 K aguje ac, Se bia ma ko.milasino [email protected]. s, [email p o ec ed]om, bjo ko [email protected]. s ARTICLE INFO O iginal Scien i ic A icle A icle His o y: Recei ed Sep embe 2022 Re ised Feb ua y 2023 Accep ed Feb ua y 2023 JEL Classi ica ion: G21, G30 Keywo ds: Banks Boa d o di ec o s Gende s uc u e Di idend policy Wes e n Balkans UDK: 336.7:305-055.2 DOI: 10.2478/ngoe-2023-0002 Ci e his a icle as: Milašino ić, M., Radoje ić, A., & Jo ko ić, B. (2023). Cha ac e is ics o he Boa d o Di ec o s and Di idend Policy: A Case S udy o Banks in Wes e n Balkans. Naše Gospoda s o/Ou Economy, 69(1), 10-18. DOI: 10.2478/ngoe-2023-0002. ©2022 The Au ho s. Published by Sciendo on behal o Uni e si y o Ma ibo , Facul y o Economics and Business, Slo enia. This is an open access a icle unde he CC BY-NC-ND license (h p://c ea i ecommons.o g/licenses/ by-nc-nd/4.0/). Abs ac This pape examines he in luence o he size and pa icipa ion o women in he boa d o di ec o s on he di idend policy o banks in Wes e n Balkans. The esea ch co e ed 104 banks, obse ing hei di idend policy om 2017 o 2019. The di idend payou a io was measu ed by he di idend policy. A ela i ely small numbe o banks paid di idends du ing he obse a ion pe iod. By applying he Fixed-E ec model, i was de e mined ha he size o he boa d o di ec o s has a s a is ically signi ican posi i e impac on he di idend policy o obse ed banks. Conce ning he pa icipa ion o women on he boa d o di ec o s, a s a is ically signi ican impac on he di idend policy o banks was no iden i ied. In addi ion o con ibu ing o he exis ing li e a u e on co po a e inances, he esea ch esul s can be c ucial o in es o s when deciding o in es unds in bank s ocks. In oduc ion Di idends a e he dis ibu ion o company p o i s o sha eholde s in p opo ion o hei owne ship (Kneže ić e al., 2019). The decision on di idend paymen s no only depends on he achie ed inancial esul bu can be condi ioned by he need o p o ec unds du ing c ises, inc eased p o i ola ili y, limi ed ex e nal inancing, o a signi ican need o capi al in he u u e (F anc-Dąb owska e al., 2020). Di idend paymen s a e ega ded as one o he mechanisms o moni o ing he company's business (Roze , 1982) and one o he mos impo an inancial decisions o he company (Ba aineh, 2020). Companies should es ablish an op imal di idend policy ha will inc ease he company's alue (Roy, 2015) and will in e ac wi h inancial and in es men decisions (Mąd a-Sawicka & Ul ich, 2020). Di idend policy is o in e es o exis ing sha eholde s, bu also o in e es o manage s, in es o s and c edi o s. I is a opic ha has been con using esea che s o a long ime (Ya am & Dolle y, 2015). The e o e, i is he subjec o nume ous deba es in inancial li e a u e (Zainudin e al., 2018), wi h heo e icians and esea che s ying o de elop models which desc ibe ac o s ha manage s need o conside when making decisions on di idend policies (Gill e al., 2010). Mos o he esea ch is based on he example o companies om he Uni ed S a es and o he de eloped coun ies (Jabbou i, 2016). * Co esponding au ho 11 NAŠE GOSPODARSTVO / OUR ECONOMY 69 (1) 2023Milašino ić, M., Radoje ić, A., Jo ko ić, B. Co po a e go e nance plays a signi ican ole in de ining di idend policies (A anasso & Mandell, 2018). Namely, in addi ion o adop ing s a egies, plans, and goals, he boa d o di ec o s decides whe he di idends will be paid and in wha amoun (Boshnak, 2021). In a si ua ion whe e di idend paymen s a e no made, he a ailable unds in ended o di idend paymen s can be edi ec ed o speci ic ac i i ies by he managemen , achie ing pe sonal in e es s ha may di e om he in e es s o he sha eholde s. In his way, an agency p oblem occu s. By deciding o pay he di idends, he eby educing he a ailable money, he managemen s i es o educe he agency p oblem (Naza , 2021). The ques ion is why he boa d o di ec o s would decide o pay di idends and/o di idend paymen s o highe alue when i is in hei "na u e" o e ain su plus money (Mulchandani e al., 2021). Saeed & Samee (2017) s a e ha one o he possible ways is "in ol ing people o di e en cha ac e is ics, o igin, and expe ience on he boa d o di ec o s" (p. 1100). The esea ch conduc ed by C edi Suisse in 2012 on a sample o 2,400 global companies ound ha companies wi h a leas one emale membe on he boa d o di ec o s had be e inancial pe o mance in compa ison o companies ha did no ha e a woman on he boa d o di ec o s (Mulchandani e al., 2021). In ecen decades, a end o inc easing emale pa icipa ion on he boa d o di ec o s was p esen , which a ec s be e decision-making o sha eholde s (Huang & Kisgen, 2013), o an inc eased amoun o di idend paymen s (Ga cía-Meca e al., 2022). In o he wo ds, cha ac e is ics o co po a e go e nance, such as he size o he boa d, he gende s uc u e o he boa d, independence o membe s, expe ise, e c., can a ec inancial decisions, including decisions ega ding di idend paymen s (Naza , 2021). Also, he e iciency o such decisions depends on he cha ac e is ics o he boa d o di ec o s (Gyapong e al., 2019). As Ain e al. (2021) s a e, he di e si y o he boa d a ec s he e iciency o wo k a he le el o indi idual membe s and he le el o he en i e eam. Howe e , nume ous s udies ha e eached di e en esul s when i comes o he in luence o he size o he boa d o di ec o s and he pa icipa ion o women in he boa d o di ec o s on he di idend policy o companies, which indica es ha hese ela ions a e mo e complex and can signi ican ly di e be ween companies (Ga cía-Meca e al., 2022). In addi ion o he ac ha ecen ly he numbe o esea ch pape s ega ding he di idend policy o banks is g owing, a ela i ely small numbe deals wi h examining he impac o he boa d o di ec o s' cha ac e is ics on he same. The subjec o his pape is di idend policy in banks ope a ing in Wes e n Balkans. These banks used o ope a e in he Republic o Se bia, he Republic o Mon eneg o, he Republic o Slo enia, The Republic o C oa ia, he Republic o No h Macedonia, and Bosnia and He zego ina ( he Republic o S pska and he Fede a ion o Bosnia and He zego ina). This pape aims o examine he in luence o he size o he boa d o di ec o s and he pa icipa ion o women in he boa d o di ec o s on he di idend policy o 104 banks in he a o emen ioned coun ies du ing he pe iod om 2017 o 2019. Acco ding o he au ho s' knowledge, i is he i s su ey ha examines he in luence o he size and gende s uc u e o he boa d o di ec o s on he di idend policies o banks in he coun ies abo e. Following he subjec and he aim o he esea ch, he ollowing esea ch ques ions we e posed in he pape : 1. Does he boa d o di ec o s' size a ec banks' di idend policy in Wes e n Balkans? 2. Does he pa icipa ion o women on he boa d o di- ec o s a ec he di idend policy o banks in Wes e n Balkans? Da a o he esea ch pu pose we e collec ed om he inancial epo s o banks. Da a analysis includes desc ip i e analysis, co ela ion analysis, and analysis o he panel da a se ies. This pape ills he gap in he li e a u e since he e is a small amoun o esea ch on he in luence cha ac e is ics o he boa d o di ec o s on di idend policies. The indings a e essen ial o in es o s when deciding o in es hei unds in bank sha es. A e he in oduc o y conside a ions, he li e a u e e iew shall ollow. The esea ch me hodology is p esen ed in he hi d pa . The esul s o he esea ch a e p esen ed in he ou h pa . In he i h pa , he concluding conside a ions a e p esen ed along wi h esea ch con ibu ions and es ic ions, and di ec ions o u u e esea ch. Li e a u e Re iew A boa d o di ec o s and hei subcommi ees can play an essen ial ole in p o iding a supe iso y and disciplina y ole and he e o e con ibu es o educing he agency p oblem (Ya am & Dolle y, 2015). Based on his, he same au ho s s a e ha he di idend policy in companies depends on he cha ac e is ics o he boa d o di ec o s in many ways. This is also con i med by a la ge numbe o pape s designed o de e mine he impac o he cha ac e is ics o he boa d o di ec o s on he di idend policy o he company. The ollowing is a ep esen a ion o p e ious esea ch ha examines he in luence o he size o he boa d o di ec o s and he pa icipa ion o women in he same on di idend policies. The size o he boa d o di ec o s is iden i ied as one o he mo e in luen ial ac o s in he decision ega ding 12 NAŠE GOSPODARSTVO / OUR ECONOMY 69 (1) 2023Milašino ić, M., Radoje ić, A., Jo ko ić, B. di idend paymen s. In he li e a u e, he e a e wo opposing iews on he impac o his cha ac e is ic o he boa d o di ec o s on di idend policy. Acco ding o he i s poin o iew, la ge boa ds enable manage s o specialize, leading o mo e e icien supe ision (Klein, 2002). This will esul in he paymen o lowe di idends (Mehdi e al., 2017). Acco ding o ano he posi ion, a la ge boa d o di ec o s expe iences ine icien decision-making and di icul y in coo dina ion, leading o a demand o highe di idends by in es o s (Jensen & Meckling, 1976). Also, a boa d o di ec o s wi h mul iple membe s may decide on highe di idend paymen s due o e o s o mee he needs o a mo e signi ican numbe o clien s (Naza , 2021). Mos o he esea ch conduc ed de e mined ha he size o he boa d o di ec o s has a posi i e impac on di idend policy (Puche a-Ma inez & Bel-Oms, 2016; Chen e al., 2017; Elmag hi e al., 2017; Suwaidan & Khala , 2020; Naza , 2021; Ain e al., 2021; Ga cía-Meca e al., 2022). In o he wo ds, companies wi h mo e membe s on he boa d o di ec o s pay highe di idends. Howe e , speci ic esea ch indica es ha he size o he boa d o di ec o s does no ha e a s a is ically signi ican impac on he company's di idend policy (Abdelsalam e al., 2008; Se ia-A maja e al., 2009; Mus a a e al., 2020; Boshnak, 2021). Resea ch has shown ha g ea e gende di e si y on he boa d o di ec o s leads o mo e a ional decisions and minimizes he agency p oblem as a consequence, which can esul in la ge di idend paymen s (Mulchandani e al., 2021). Acco ding o Mus a a e al. (2020), women ake he necessa y ac ions o esol e agency p oblems hanks o hei skills and abili ies. Namely, women a e ecognized as good business supe iso s and p o ec o s o sha eholde igh s. This is suppo ed by he ac ha emale membe s o he boa d o di ec o s a e mo e likely o a end mee ings and pa icipa e in he supe iso y boa d (Adams & Fe ei a, 2009). Also, emale membe s o he boa d o di ec o s a e mo e likely o espec he ules and a e mo e sensi i e o co po a e issues conce ning hei colleagues (Ain e al., 2021). Howe e , inc eased pa icipa ion o women on he boa d o di ec o s can esul in lowe di idend paymen s. Namely, i emale membe s o he boa d o di ec o s a e ecognized as sui able p o ec o s o sha eholde igh s, his can esul in a lowe demand o di idends (La Po a e al., 2000). The ac ha women ha e a highe a e sion o isk and a e mo e p one o e aining su plus cash (a conse a i e inancial a i ude) suppo s his s a emen (Ga cía-Meca e al., 2022). As in he case o he size o he boa d o di ec o s, esea che s a i ed a di e en esul s ega ding he in luence o women's pa icipa ion in he boa d o di ec o s on di idend policies. The e o e Wellalage e al. (2012), Puche a-Ma inez & Bel-Oms (2016), Pahi & Yada (2018), Gyapong e al. (2019), Mulchandani e al. (2021), T inh e al. (2021) and Ain e al. (2021) de e mined ha he pa icipa ion o women on he boa d o di ec o s posi i ely a ec s di idend policies. In o he wo ds, along wi h he g ow h o emale pa icipa ion on he boa d o di ec o s, he e is a ise in di idend paymen s. On he o he hand, Mus a a e al. (2020) de e mined ha he pa icipa ion o women on he boa d o di ec o s ha ms di idend policy, while McGuinness e al. (2015) ound ha his in luence is no s a is ically signi ican . When i comes o he in luence o he cha ac e is ics o he boa d o di ec o s on he di idend policy o banks, wo esea ch pape s a e ele an . Al-Ama neh e al. (2017), on a sample o 13 comme cial banks lis ed on he Amman S ock Exchange in Jo dan in he pe iod om 2005 o 2014 ha e de e mined ha he size o he boa d o di ec o s o he bank does no ha e a s a is ically signi ican impac on di idend policy (exp essed by di idend payou a ios and di idend yields). Rega ding he pa icipa ion o women on he boa d o di ec o s, i has been de e mined ha i has a s a is ically signi ican posi i e impac on di idend yield alues. In con as , he impac on he alues o he di idend payou a io is no s a is ically signi ican . Obse ing he banks lis ed on he Indonesia S ock Exchange in he pe iod om 2009 o 2019, Uma Mai & Sya ie (2021) ha e de e mined ha he size o he boa d has a s a is ically signi ican posi i e in luence on he p opensi y o di idend paymen s, while he e is a nega i e s a is ical impac on he alue o he di idend payou a io. The pa icipa ion o women on he boa d o di ec o s has a s a is ically signi ican nega i e impac on he p opensi y o di idend paymen s in he banks obse ed in Indonesia. A he same ime, he impac on he alue o di idend payou a ios is also nega i e bu no s a is ically signi ican . Resea ch Me hodology This pape includes esea ch on banks ha ope a ed in he Wes e n Balkans a he end o 2020, examining hei di idend policy om 2017 o 20191. The e o e, he esea ch includes 252 banks om he Republic o Se bia, 20 om 1 As di idends in he cu en yea a e paid o he p e ious yea , a he ime o conduc ing his esea ch, he inancial s a emen s o all obse ed banks we e no publicly a ailable o 2021, so i was no possible o e iew hei di idend policy o 2020. 2 Acco ding o he da a o he Na ional Bank o Se bia, a he end o 2020, 26 banks ope a ed in Se bia, howe e he Bank o China Se bia A.D. Belg ade was excluded om he esea ch (because i is a bank ounded on 22.12.2016., and o icially began ope a ion in 2017, so he da a om 2016 was no a ailable). 13 NAŠE GOSPODARSTVO / OUR ECONOMY 69 (1) 2023Milašino ić, M., Radoje ić, A., Jo ko ić, B. he Republic o C oa ia, 133 om Slo enia, 214 om Bosnia and He zego ina, 12 om Mon eneg o, and 135 banks om No h Macedonia. The inal sample consis s o 104 banks, o 312 obse a ions, which is he co esponding sample size6 acco ding o Tabachnick & Fidell (2007). Banks' indi idual inancial s a emen s we e used as da a sou ces o his esea ch. Di idend policy was obse ed in di idend payou a ios (DPR). As independen a iables, he size o he boa d o di ec o s (SIZE_BOARD) and he pa icipa ion o women on he boa d o di ec o s o he bank (GENDER) we e used. In acco dance wi h p e ious esea ch, as con ol a iables speci ic o banks, p o i abili y (PROF), le e age (LEV), he g ow h a e o he in e es income (GR_R), and di idends om he p e ious yea (PREV_DIV) we e used. Table 1 shows he me hod o de e mining he used a iables. The impac o hese de e minan s on he paymen o di idends is examined based on a panel eg ession analysis. I is a me hod used in ea lie , simila esea ch (F anc-Dąb owska e al., 2020; Mąd a-Sawicka & Ul ich, 2020; Boshnak, 2021; Jo ko ić e al., 2021; Mulchandani e al., 2021). In his ega d, i is possible o o mula e he ollowing gene al model o he panel eg ession analysis in esea ch: DPRBOARD SIZE GENDER PROF LEVGRR i i i i i       123 45 _ _ ii i i i SIZE PREV DIV     6 7 _ (1) In addi ion o he panel abo e eg ession analysis, he esul s o desc ip i e s a is ics will be p esen ed in he pape and co - ela ion analysis. S a is ical da a p ocessing was pe o med using IBM SPSS and EViews s a is ical packages. 3 Acco ding o he da a o he Bank o Slo enia, a he end o 2020, 15 banks ope a ed in Slo enia, howe e ABANKA d.d was excluded om he esea ch (due o he lack o a ailable inancial s a emen s o 2020) and Slo ene Expo and De elopmen (SID) Bank d.d. Ljubljana (because i is a bank ha is 100% owned by he Republic o Slo enia). 4 Acco ding o he Cen al Bank o Bosnia and He zego ina, a he end o 2020 in Bosnia and He zego ina ( he Fede a ion o Bosnia and He zego ina and he Republic o S pska), 22 banks we e ope a ional, bu he De elopmen Bank o he Fede a ion o Bosnia and He zego ina was excluded om he esea ch (because i is a bank which is 100% owned by he Fede a ion o Bosnia and He zego ina, whose ask is he implemen a ion o he economic policy o he Go e nmen o he Fede a ion o Bosnia and He zego ina o economic de elopmen and employmen ). 5 Acco ding o he Na ional Bank o he Republic o No h Macedonia, a he end o 2020 in he Republic o No h Macedonia, 14 banks we e ope a ional, bu he De elopmen Bank o No h Macedonia was excluded om he esea ch (because i is a bank which is 100% owned by he Republic o No h Macedonia, whose ask is he implemen a ion o he economic de elopmen and employmen ). 6 Tabachnick & Fidell (2007, p.123), indica e ha he minimum numbe o obse - a ions should be de e mined acco ding o he o mula N>50+8m, wi h N as he minimum numbe o obse a ions, while m indica es he numbe o independen a iables. As 7 a iables a e used in he esea ch, he minimum numbe o ob- se a ions is 106. Resea ch Resul s and Discussion F om he 312 obse a ions, di idend paymen s we e eco ded in 85 obse a ions. F om ha numbe , 22 obse a ions we e eco ded in Slo enia, 18 in Se bia, 17 in C oa ia, 16 in No h Macedonia, 10 in Bosnia and He zego ina, and wo in Mon eneg o. Rega ding yea ly obse a ions, 38 banks paid di idends o 2018, 37 o 2017, and 10 o 2019. Only se en banks paid di idends o all h ee obse ed yea s. Table 2 shows he esul s o desc ip i e s a is ics. As seen in Table 2, he a e age amoun o ea nings paid ou in he o m o di idends is 19.51%. Banks' boa ds o di ec o s ha e abou 4 membe s on a e age, which a ies om 2 o 8. On a e age, almos a qua e o he boa d o di ec o s membe s a e women, whe eas i is eco ded ha in some banks, all membe s o he boa d a e emale in gende . On he o he hand, i was also eco ded ha he boa d o di ec o s o indi idual banks consis s only o pe sons o he male gende . The a e age p o i abili y o banks obse ed du ing he pe iod was 0.73%, while he a e age sha e o liabili ies in o al asse s was 85.87%. The a e age g ow h a e o in e es income amoun ed o 2.85%. The esul s o Pea son's co ela ional analysis a e gi en in Table 3. The exis ence o a s a is ically signi ican posi i e dependency be ween he di idend payou a io and he size o he boa d o di ec o s was de e mined, whe eas his dependency is small ( =0.136; p=0.016). Also, a posi i e dependency is p esen be ween he di idend paymen a io and he pa icipa ion o women on he boa d o di ec o s, bu i is no s a is ically signi ican . A s a is ically signi ican posi i e dependence has been iden i ied be ween he di idend paymen s and he ac ha banks paid di idends in he p e ious yea , whe eas his dependency is o medium in ensi y ( =0.468, p=0.000). Also, a s a is ically signi ican posi i e dependency o medium in ensi y has been eco ded be ween he di idend payou a io and he size o he bank ( =0.376; p=0.000). A posi i e s a is ically signi ican dependency was iden i ied be ween he di idend payou a io and p o i abili y o banks, wi h a dependence o small in ensi y ( =0.166; p=0.003). Also, he exis ence o (posi i e o nega i e) s a is ically signi ican dependencies be ween independen a iables can be no iced in Table 3, wi h a small in ensi y o dependence. Based on his, he p esence o mul icollinea i y shouldn’ be expec ed. Table 4 shows he esul s o he Hausman es . This es shows ha he Fixed-E ec s model is mo e adequa e in analyzing he collec ed da a han he Random-E ec s model. The esul s o he Fixed-E ec s eg ession analysis 14 NAŠE GOSPODARSTVO / OUR ECONOMY 69 (1) 2023Milašino ić, M., Radoje ić, A., Jo ko ić, B. Table 1 Resea ch a iables Va iable Symbol Desc ip ion Dependen Va iable Di idend payou a io DPR Cash di idend/Ne p o i Independen Va iables Con ol Va iables BOARD_SIZE To al numbe o boa d membe s Pe cen age o emale di ec o s on he boa d GENDER The pe cen age o emale di ec o s on he boa d o boa d size Con ol Va iables P o i abili y PROF Ne p o i / To al asse s Le e age LEV To al liabili y/To al asse s G ow h a e GR_R (Cu en in e es income-Las yea in e es income)/Las yea in e es income Bank size SIZE Na u al loga i hm o o al asse P e ious yea ’s di idends PREV_DIV Dummy a iable coded as 1 o banks which decla ed and paid Sou ce: Au ho s’ esea ch Table 2 Desc ip i e s a is ics Va iables Mean Median S anda d de ia ion Minimum Maximum DPR 0.1951 0 0.452 0 2.9578 BOARD_SIZE 4.22 4 1.585 2 8 GENDER 0.2442 0.2501 0.2133 0 1 PROF 0.0073 0.0077 0.0184 -0.0806 0.1205 LEV 0.8587 0.8702 0.0625 0.5901 0.9873 GR_R 0.0285 -0.0058 0.894 -0.7438 15.3571 SIZE 13.2318 13.1114 1.33631 10.026 16.9839 PREV_DIV 0.343 0 0.475 0 1 Sou ce: Au ho s’ esea ch Table 3 Co ela ion ma ix DPR BOARD_SIZE GENDER PROF LEV GR_R SIZE PREV_DIV DPR 1 BOARD_SIZE 0.136* 1 GENDER 0.013 -0.069 1 PROF 0.166** 0.072 -0.063 1 LEV -0.019 -0.394** -0.073 0.046 1 GR_R -0.062 0.080 0.033 -0.216** -0.277 1 SIZE 0.376** 0.264** -0.052 0.282** 0.008 -0.181** 1 PREV_DIV 0.468** 0.034 0.078 0.266** 0.108 -0.070 0.244** 1 Sou ce: Au ho s' esea ch No e: * and ** indica e signi icance a he 0.05 and 0.01 le els, espec i ely 15 NAŠE GOSPODARSTVO / OUR ECONOMY 69 (1) 2023Milašino ić, M., Radoje ić, A., Jo ko ić, B. a e p esen ed in Table 5. Based on he alue o he co ec ed de e mina ion coe icien , i can be concluded ha he obse ed independen a iables a e capable o explaining a ia ions in he alue o he di idend payou a io, in he amoun o 24.89%. Acco ding o Field (2013), he e is no au oco ela ion p oblem, since he alue o he Du bin-Wa son es (2.6381) is in an in e al om 1 o 3. Table 4 Hausman es Tes summa y Chi. Sq. S a p- alue 12.1466 0.0158 Sou ce: Au ho s' esea ch As seen in Table 5, he size o he boa d o di ec o s has a s a is ically signi ican posi i e impac on he di idend policy o obse ed banks and his p o ides us wi h an answe o he i s esea ch ques ion. This indica es a g ea e likelihood o bank di idend paymen s i hey ha e mo e membe s on he boa d o di ec o s. N im e al. (2015) explain his by he ac ha a la ge boa d o di ec o s, hanks o g ea e knowledge and expe ience, is mo e success ul in moni o ing and con olling he oppo unis ic beha io o manage s, which a ec s he educ ion o he agency p oblem and imp o es business esul s, i.e., di idend paymen s. Di idend payou posi i ely a ec s boa d composi ion, sugges ing ha i ms wi h high-payou end o adop good co po a e go e nance s uc u es o p o ec sha eholde in e es (Naza , 2021, p. 291). This may a ec he awa eness o sha eholde s o hold s ocks. In his way, banks can p o ec hemsel es om akeo e s. When i comes o esea ch conduc ed on he example o banks, Uma Mai & Sya ie (2021) de e mined ha he size o he boa d posi i ely a ec s he p opensi y o pay di idends while nega i ely a ec ing he alue o di idend payou a ios. I was de e mined ha he pa icipa ion o women on he boa d o di ec o s nega i ely a ec s he di idend policy o banks, whe eas his impac is no s a is ically signi ican (Table 5). Uma Mai & Sya ie (2021) came o simila conclusions. Namely, hey ound ha he pa icipa ion o women on he boa d o di ec o s has a nega i e s a is ically signi ican impac on di idend paymen endencies. A he same ime, he impac on he alue o di idend payou a ios is also nega i e bu no s a is ically signi ican . On he o he hand, Al- Ama nech e al. (2017) ound ha he pa icipa ion o women on he boa d o di ec o s posi i ely a ec s he di idend policy o banks exp essed by he di idend yield, while he e is no s a is ically signi ican impac on he di idend payou a io. As an explana ion o he nega i e, bu no s a is ically signi ican , pa icipa ion o women on he boa d o di ec o s ega ding he di idend policy o obse ed banks, we can s a e ha hese banks mainly ope a e in de eloping ma ke s. Due o he unce ain y o doing business in hese ma ke s, he emale membe s o he boa d o di ec o s will in luence he eaching o conse a i e inancial decisions and he paymen o lowe di idends (Saeed & Samee , 2017). This is in line wi h he heo y o gende socializa ion, acco ding o which women a e conside ed mo e conse a i e han men when making inancial decisions (Ga cía-Meca e al., 2022). The di e ence in he esul s abou he in luence o women membe s o he boa d o di ec o s on he di idend policy can also be explained by he ac ha ea lie esea ch did no examine how many o hem o ed o he paymen o di idends. Fo hese easons, a su ey on his opic should be conduc ed in u u e esea ch. This would esul in mo e p ecise in o ma ion abou he in luence o women membe s o he boa d o di ec o s on he di idend policy. Table 5 Fixed-e ec s eg ession analysis esul s Va iables Coe icien - alue Sig. In e cep -0.9170 -0.4739 0.6361 BOARD_SIZE 0.1244 2.4139 0.0167 GENDER -0.2495 -0.7592 0.4486 PROF -0.7239 -0.3125 0.7549 LEV -1.1991 -0.9590 0.3387 GR_R -0.0190 -0.5658 0.5721 SIZE 0.1250 0.7962 0.4269 PREV_DIV 0.1223 0.9735 0.3315 Adjus ed R squa e=0.2489; F=1.9371; (p(F s a is ic)=0.000); Du bin-Wa son s a .=2.6381 Sou ce: Au ho s' esea ch Conclusion Di idend policy ep esen s a c ucial opic in he ield o co po a e inance. Much esea ch has been conduc ed o de e mine he in luence o co po a e go e nance cha ac e is ics on he di idend policy o companies ope a ing in di e en ma ke s and indus ies, whe eby esea che s a i ed a a ious esul s. Howe e , in a small po ion o he esea ch, he impac o he cha ac e is ics o co po a e go e nance on he di idend policy o banks and o he inancial ins i u ions was examined. This pape 16 NAŠE GOSPODARSTVO / OUR ECONOMY 69 (1) 2023Milašino ić, M., Radoje ić, A., Jo ko ić, B. aims o examine he in luence o he size o he boa d o di ec o s and pa icipa ion o women in he boa d o di ec o s on he di idend policy o banks which ope a e in he Wes e n Balkans, whe eas di idend paymen a ios exp ess di idend policies. By applying he eg ession Fixed-E ec model, esea ch was conduc ed on a sample o 104 banks, whe eas hei di idend policy was obse ed in he pe iod om 2017 o 2019. The esea ch ound ha mos banks du ing he obse ed pe iod did no pay di idends, whe eas his numbe dec eased du ing he obse ed pe iod. The mos signi ican numbe o di idend paymen s was eco ded in banks ope a ing in Slo enia, while he leas was eco ded in he Republic o Mon eneg o banks. Less han 7% o he obse ed banks ha e made di idend paymen s du ing all h ee yea s o obse a ion. I was de e mined ha he size o he boa d o di ec o s o he bank posi i ely a ec s i s di idend policy, i.e., banks wi h a mo e signi ican numbe o membe s on he boa d o di ec o s pay di idends o a g ea e ex en . On he o he hand, he exis ence o a s a is ically signi ican in luence o he pa icipa ion o women on he boa d o di ec o s ega ding di idend policies o obse ed banks was no iden i ied. Also, he impac o con ol a iables (p o i abili y, le e age, he g ow h a e o in e es income, bank size, and di idends om he p e ious yea ) on he di idend policy o banks is no s a is ically signi ican . Resea ch o e s se e al heo e ical con ibu ions o he exis ing li e a u e. Fi s ly, i is complemen a y o he exis ing esea ch ha aimed o iden i y ac o s o he di idend policies o banks. Secondly, i akes in o accoun he impac o he boa d o di ec o s' cha ac e is ics on he banks' di idend policy, and acco ding o he au ho , his is he i s esea ch conduc ed on a sample o banks in Wes e n Balkans. In addi ion, he esul s o his esea ch can be signi ican , abo e all, o in es o s when deciding o in es hei unds in bank sha es. Namely, hey should conside he size o he boa d o di ec o s when deciding o pu chase sha es and he e o e achie e a highe yield on he basis o di idends. Se e al es ic ions appea in his pape which p o ides di ec ions o u u e esea ch. Since his esea ch only examined he in luence o he size and gende s uc u e o he boa d o di ec o s on he bank's di idend policy, o he cha ac e is ics o he boa d o di ec o s should also be included in he u u e esea ch, such as wo k expe ience, educa ion, numbe o mee ings, independence o membe s o he boa d e c. Also, in u u e esea ch, he in luence o he owne ship s uc u e and he audi commi ee on he di idend policy o banks should be conside ed. Since he esea ch co e ed he di idend policy o banks om 2017 o 2019, he in luence o COVID-19 should be examined in u u e esea ch. 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