Micro and macro impacts on distribution of profit margin policy: A practice of BIST 100 companies

Making profit is among the top most priorities of companies. Stockholders want to increase their wealth by gaining profit margin or capital increase in return for their investment in these companies. Administrators try to balance the targets of the company and stockholders. Profit margin policy contributes favorably both the value of company and stockholders' capital, which is of great importance that the factors affecting profit margin policy are to be recognized and decision makers should behave accordingly. In this study we aim to find the micro and macro factors affecting the distribution of profit margin policy decisions of companies listed in Stock Market Istanbul 100 between 2009 and 2018. We find the micro and macro factors in the light of studies in the literature and test the hypothesis using panel data analysis. We develop two models to use in the study. In the models, while the dependent variable is determined as the rate of dividend distribution, independent variables are profitability, earnings per share, investment opportunity, size, liquidity, rate of indebtness, free float rate, company age, tangible asset, economic growth, inflation, rate of interest and exchange rate. We found avoidant relationship between the dividend distribution and profitability, size, rate of indebtness, free float rate and inflation; on the other hand positive relationship is found between distribution of profit margin policy and earnings per share, investment opportunity, company age and exchange rate. Statistical significance is not found between distribution of profit margin policy of companies and liquidity, economic growth and rate of interest.