Dividend Payout in Global Financial Markets

Abstract

This study analyzes the variation of the Dow Jones Global Select Dividend Index (hereafter, DJGSD) with the GDP growth rates of major economies of the world including the United States, the United Kingdom, and Germany. The process involves reducing the number of independent variables down to a single explanatory component. This is followed by performing a robust analysis between DJGSD and the extracted explanatory component. The final outcome of the study computes and describes the coefficient of correlation and coefficient of determination between DJGSD and the principal component (that best represents the variation in the dataset because of U.S., U.K., and German GDP growth rates).