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CORPORATE GOVERNANCE AND DIVIDEND PAYOUT POLICY: BEYOND COUNTRY‐LEVEL GOVERNANCE
Author(s) -
Chang Bin,
Dutta Shantanu,
Saadi Samir,
Zhu PengCheng
Publication year - 2018
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/jfir.12159
Subject(s) - corporate governance , shareholder , dividend payout ratio , dividend , business , dividend policy , sample (material) , monetary economics , financial system , financial crisis , accounting , empirical evidence , economics , finance , macroeconomics , chemistry , chromatography , philosophy , epistemology
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.