Variance decomposition of the country, industry, firm, and firm-year effects on dividend policy

•This study examines whether and how much the country, industry, firm, and firm-year levels matter to dividend policy.•We employ hierarchical linear modeling to decompose the variance in dividend policies in a global sample of 8,903 firms over an 11-year period.•The firm and firm-year effects are the strongest, while the country and industry effects are weaker.•Effects across levels are stable over time.Future research may benefit from focusing on firm level determinants, rather than on country or industry level determinants, of dividend policy.•The choice of dividend payout ratio matters as different ratios are influenced asymmetrically by different levels of analysis.