Corporate Governance, Ownership Structure and Dividend Smoothing: The Mediating Role of Family Ownership and Board Diversity in Emerging Markets

Purpose: The study attempts to explore the determinants of dividend smoothing behavior of firms by using firm’s specific characteristics, corporate governance and ownership structure variables as determinants of dividend smoothing in emerging markets due to their unique features from Western markets. The current study is undertaken to fill this gap in the literature. Design/methodology/approach: In order to achieve the research objectives penal data (2009-2018) of more than 1000 Asian firms were analyzed by using Statistical techniques such as pool, fixed and random models. Findings: Based on gender critical mass theory, the study finds that the presence of gender critical mass is positive and significantly associated with firm dividend smoothing behavior; whereas, presence of fewer women depicts negative or insignificant association with dividend smoothing behavior. Importantly, the study also finds moderating role of gender diversity between family ownership and firm’s dividend smoothing behavior. Furthermore, contrary to the agency theory based on explanations of dividend smoothing, firms with family ownership smooth dividend more in emerging markets. Practical implications: This paper helps out to the current as well as future potential investors to make better decision in such a changing economy as well as to help investors in selecting better investment opportunity to make their investment more profitable. Originality/value: The current study is the first of its kind to investigate dividend-smoothing behavior for more than 1000 firms of emerging Asian countries based on cross country analysis.