Author(s)

Safdar Husain Tahir^1*, Muhammad Rizwan Ullah¹, Sajid Mahmood²

¹Department of Banking and Finance, Government College University, Faisalabad, Pakistan.
²School of Management Sciences, Quaid-i-Azam University, Islamabad, Pakistan.

This study investigates empirically the effect of dividend policy and investment decision on financing decision. To obtain the objectives, the data required, ranging from 2004 to 2013, were collected from the financial statements of all the banking firms listed in Karachi Stock exchange. Investment opportunity and actual investment were used as proxies of investment decision. Profitability and firm size were used as control variables. Multiple regression models were used to estimate the variables of interest. It was concluded that investment opportunity had significant effect on financing decision; however, the effects had no particular pattern. Furthermore, actual in-vestment and dividend policy had no impact on financing decision.

Banking Sector, Dividend Policy, Financing Decision, Investment Decision, Multiple Regression Model

Tahir, S. , Rizwan Ullah, M. and Mahmood, S. (2015) Banks Dividend Policy and Investment Decision as Determinants of Financing Decision: Evidence from Pakistan. American Journal of Industrial and Business Management, 5, 311-323. doi: 10.4236/ajibm.2015.55032.