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

Author

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  • Tahir Akhtar

    (Department of Economics and Finance, College of Business Administration, University of Ha’il, Saudi Arabia)

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.

Suggested Citation

  • Tahir Akhtar, 2022. "Corporate Governance and Dividend Payments. An Evidence from ASEAN-5," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 72(4), pages 356-381, December.
    • Handle: RePEc:fau:fauart:v:72:y:2022:i:4:p:356-381
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    File URL: https://journal.fsv.cuni.cz/mag/article/show/id/1509
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    More about this item

    Keywords

    corporate governance; dividend payments (DP): ASEAN; manufacturing sector;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables

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