The effect of trade policy uncertainty, free cash flow, investment opportunity set, and liquidity on dividend policy of food and beverage sub-sector companies listed on the Indonesia Stock Exchange, 2022–2025

Shifts in international trade policy may change how firms divide cash between shareholders and retention, yet evidence on this link for emerging-market firms remains scarce. This study examines whether trade policy uncertainty (TPU), free cash flow, the investment opportunity set (IOS), and liquidity are associated with the dividend payout ratio of food and beverage firms listed on the Indonesia Stock Exchange. Drawing on agency, signaling, and pecking-order perspectives, we analyze a balanced panel of 27 regular dividend-paying firms over 2022–2025 (108 firm-year observations) using random-effects regression with standard errors clustered by firm, selected through Chow, Lagrange multiplier, and Hausman tests. IOS is the only variable significantly and positively associated with payout; the association is economically meaningful, equal to about one-third of the standard deviation of payout per standard-deviation increase in IOS, and it also holds in a fixed-effects specification. TPU, free cash flow, and liquidity show no statistically significant association, although the estimates are imprecise and do not rule out sizeable effects, and the model as a whole has low explanatory power. These results indicate that, among regular payers, payout is related more to the market’s valuation of growth prospects than to trade policy uncertainty. Because TPU varies only by year, the sample excludes non-payers, and no control variables are included, the findings are associations and should not be generalized to non-paying firms. The study provides a baseline for future research using firm-level exposure to trade policy and broader samples.