The Jordanian Catering Theory of Dividends
This paper aims to investigate the validity of Catering Theory of dividend in the Jordanian market. Utilizing unbalanced pooled cross-sectional time series OLS regression model for all Amman Stock Exchange listed companies, after excluding the financial sector firms and non-consistently dividends-paying firms, for the time period of 1999–2013. Findings indicate that dividend premium, a proxy for Catering Theory, is affected by the explanatory variables. Therefore, the study concluded that Amman Stock Exchange listed companies counts for the investors require for dividends and react to this require in their dividend policy, and thus, confirming the validity of the Catering Theory of dividend in the Jordanian market.