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Volume 72, Issue 4


Corporate Governance and Dividend Payments. An Evidence from ASEAN-5

Akhtar, Tahir

Year: 2022   Volume: 72   Issue: 4   Pages: 356-381

Abstract: Using GMM on the data from 689 firms between 2000 and 2015, the study examines the impact of corporate governance on dividend payments (DP) in ASEAN-5. The findings show that a higher percentage of the share ownership by the chief executive officer (CEO) and the founders as CEOs, and a large number of independent directors, increase DP in firms, indicating a decrease in internal funds that could be otherwise misused, supporting the interest alignment hypothesis. In contrast, a higher percentage of CEOs with dual positions and a larger board decreases the DP, indicating an increase in internal funds that can be used for personal benefits, supporting the agency cost hypothesis. In addition, CEOs with dual positions in small firms encourage the DP, while governance practices in medium-sized firms reduce the DP to use funds for potential future investment opportunities. Moreover, the impact of corporate governance on the DP differs significantly in the period before and after the 2008-2009 financial crisis. The policy implications are highlighted at the end of the study.

JEL classification: G3, L6, C3

Keywords: corporate governance, dividend payments (DP): ASEAN, manufacturing sector

DOI: https://doi.org/10.32065/CJEF.2022.04.03

RePEc: https://ideas.repec.org/a/fau/fauart/v72y2022i4p356-381.html

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