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Corporate Governance and Dividend Policy in the Presence of Controlling Shareholders

Author

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  • Ricardo Rodrigues

    (Advance/CSG, ISEG, Lisbon School of Economics and Management, Universidade de Lisboa, 1649-004 Lisboa, Portugal)

  • J. Augusto Felício

    (Advance/CSG, ISEG, Lisbon School of Economics and Management, Universidade de Lisboa, 1649-004 Lisboa, Portugal)

  • Pedro Verga Matos

    (Advance/CSG, ISEG, Lisbon School of Economics and Management, Universidade de Lisboa, 1649-004 Lisboa, Portugal)

Abstract

Based on agency theory, we focused on the influence of corporate governance in the dividend policy of large listed firms with headquarters in continental Europe countries. Previous research focused on the influence of corporate governance on the performance and risk of listed firms, but the influence of corporate governance on the dividend policy has rarely been addressed despite the importance of dividends for shareholders and the implications on the free cash-flow, whose application may be a source of conflicts between managers and shareholders. In this paper, we study the influence of a set of governance mechanisms on the dividend policy over 12 years (2002 to 2013). The results, based on a panel data analysis, support the importance of governance mechanisms toward the protection of shareholders’ interests, and reveal that the decisions on whether to pay dividends and how much to pay are grounded on different antecedents.

Suggested Citation

  • Ricardo Rodrigues & J. Augusto Felício & Pedro Verga Matos, 2020. "Corporate Governance and Dividend Policy in the Presence of Controlling Shareholders," JRFM, MDPI, vol. 13(8), pages 1-15, July.
    • Handle: RePEc:gam:jjrfmx:v:13:y:2020:i:8:p:162-:d:390070
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    References listed on IDEAS

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    1. Bukalska Elżbieta & Zabediuk Myroslava & Mostovenko Nataliia, 2023. "Conflict of interests among shareholders – does it refer to dividend decisions?," Folia Oeconomica Stetinensia, Sciendo, vol. 23(1), pages 16-41, June.
    2. Samuel Mongrut Montalvan & Carlos Mario Ramirez Arango & Julian Usma Patiño, 2023. "Corporate Governance and Dividend Policy: Evidence from Colombia," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 18(4), pages 1-19, Octubre -.
    3. Dan Lin & Lu Lin, 2020. "Does Corporate Governance Affect the Critical Corporate Policies such as Dividend Policy?," International Journal of Economics and Financial Issues, Econjournals, vol. 10(6), pages 18-24.

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