Testing dividend life-cycle theory in the Islamic and conventional banking sectors of GCC countries

Purpose This paper aims to present a comparative evaluation of the determinants affecting likelihood dividend payouts by Islamic and conventional banks in Gulf Cooperation Council (GCC) countries. Design/methodology/approach The authors used dynamic panel logit model test life-cycle theory analyzing GCC banks. Moreover, multinomial logistic regressions extend results where dependent variable is nominal equal 1 for non-payment dividends, 2 lower payments 3 higher payments. Findings report finding consistent with dividends proportion retained-earnings-to-contribution mix implies greater payments, apart from characteristics such as profitability, size growth. However, find marked differences magnitude significance explaining also that are smaller less profitable relative but have growth rates, which helps explain why non-payments than indicate default rates business risk associated reduces their propensity pay dividends. Practical implications topic remains an important puzzle field modern finance. findings significant variety stakeholders both countries, including investors, depositors, analysts, managers, regulators stock exchanges. Originality/value contribute literature drawing on basis comparing