An Thi Thuy Duong

Type of the article: Research Article

Abstract
Economic policy uncertainty has become a persistent feature of the business environment, yet evidence on how policy-specific uncertainty affects corporate payouts in transition economies remains limited. This study examines how monetary, fiscal, and trade policy uncertainty affects the dividend payout decisions of non-financial listed firms in Vietnam, and whether ownership structure moderates these effects. The analysis uses panel data for 1,591 firms listed on Vietnam’s major stock exchanges during 2016–2024, using government-sourced uncertainty indices and the Correlated Random Effects estimator. The results show that monetary, fiscal, and trade policy uncertainty all exert negative and statistically significant effects on dividend payouts, indicating that firms reduce cash distributions when policy uncertainty increases. The ownership results also reveal clear heterogeneity. State-dominated firms cut dividends more sharply under rising uncertainty, while private-dominated and foreign-dominated firms exhibit smaller payout adjustments and relatively more stable dividend behavior. These patterns suggest that precautionary motives are important in shaping payout policy, but that governance structure conditions the strength of this response. Additional robustness checks using an alternative payout measure and a high-dimensional fixed effects specification yield qualitatively similar results. Overall, the findings indicate that a more stable and predictable policy environment may help reduce defensive corporate payout behavior and improve the consistency of firms’ financial decisions in a transition economy.