This study aims to provide new evidence linking internal corporate governance mechanisms and corporate misconduct, using a sample of 2,844 public US companies during the period 2007-2019. The results reveal that optimal size and diverse boards, including well-functioning audit com- mittees, are negatively related to corporate violations. In contrast, we show that board mem- bers’ independence, activity, and ownership are positively related to a rm’s fraudulent activities. Therefore, not all internal governance mechanisms are related to lower corporate misconduct. Moreover, we show that some internal governance mechanisms, such as the share of female board members, mitigate only certain types of corporate misconduct. The results show that attempts to regulate corporate governance mechanisms should be considered with caution as they do not always provide the expected outcome

We use a novel measure of firm-level political risk based on a textual search technique on firms' quarterly earnings conference transcripts to explain dividend payouts in publicly listed U.S. firms. We find a positive and significant effect of firm-level political risk on dividend payouts, particularly in uncertainties related to economics, institutions, technology, trade, and security. The effect is more pronounced in firms with better corporate governance, less analyst follow-up, and higher growth opportunities. These results support the signaling role of dividends rather than the role of agency theory in explaining dividend payouts when firms are associated with higher levels of political risk. We also find the effect to be prominent after controlling for an aggregate measure of economic policy uncertainty and in poor economic conditions and in major political event periods. We address endogeneity concerns by running placebo tests and conducting instrumental variable analysis and we alleviate self-selection bias by performing propensity score matching technique.(This abstract was borrowed from another version of this item.)