Effect of Institutional Depositors on Banks' Dividend Policy: Evidence from Korea during the Global Financial Crisis. (29th September 2022)

• Record Type: Journal Article
• Authors: Jung, Hyun‐Jae; Lee, Jinho; Park, Young S.
• Is Part Of: Asia-Pacific journal of financial studies. Volume 51:Number 4(2022)
• Page Start: 541
• Page End: 568
• Publication Date: 2022-09-29
• Subjects: Banks -- Institutional depositor -- Global financial crisis -- Dividends -- Risk‐shifting; G21 -- G35 -- G38; Pacific Area -- Economic conditions -- Periodicals; Finance -- Asia -- Periodicals; Finance -- Pacific Area -- Periodicals; Asia -- Economic conditions -- Periodicals; 332.09505
• DOI: 10.1111/ajfs.12390
• Languages: English
• ISSNs: 2041-9945

Abstract

Abstract: This study investigates the motive for dividends by examining the relationship between dividends and banks' institutional depositors during the global financial crisis. The results indicate that during the financial crisis, the higher the deposit ratio of institutional depositors to the total insured deposits was, the lower the dividend payments were. This may be attributable to the fact that during the financial crisis, banks significantly reduced their dividends because they were under close monitoring due to the fear that institutional depositors would overreact to disadvantageous policy and cause a bank run.