CORPORATE GOVERNANCE AND DIVIDEND PAYOUT POLICY: BEYOND COUNTRY‐LEVEL GOVERNANCE. (4th December 2018)

• Record Type: Journal Article
• Authors: Chang, Bin; Dutta, Shantanu; Saadi, Samir; Zhu, PengCheng
• Is Part Of: Journal of financial research. Volume 41:Number 4(2018)
• Page Start: 445
• Page End: 484
• Publication Date: 2018-12-04
• Subjects: Finance -- Periodicals; Investments -- Periodicals; 332
• DOI: 10.1111/jfir.12159
• Languages: English
• ISSNs: 0270-2592

Abstract

Abstract: We address the mixed empirical findings on how corporate governance affects dividend payout policy by analyzing a large sample of firms from 30 countries. Our results indicate that firms with better firm‐level governance pay more dividends, even after controlling for country‐level governance. However, this relation is pronounced only in countries with low shareholder rights. In addition, we find that when the shareholder rights index is high, firm‐level governance is unrelated to dividend payout in the full sample period. Finally, we show that in high‐shareholder‐rights countries, firm‐level governance changes its role from before to after the 2008–2009 financial crisis.