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Does Corporate Governance Affect the Critical Corporate Policies such as Dividend Policy?

Author

Listed:
  • Dan Lin

    (Department of Banking and Finance, Takming University of Science and Technology, Neihu, Taipei, Taiwan,)

  • Lu Lin

    (Department of Public Finance and Taxation, Takming University of Science and Technology, Neihu, Taipei, Taiwan.)

Abstract

This study examines the influence of corporate governance on dividend policy based on a sample of Canadian firms listed on the S&P/TSX composite index during 2009-2012. The results show that firms with better governance quality, measured by the governance index provided by The Globe and Mail, have larger payouts and have a higher propensity to pay dividends. In terms of four dimensions of corporate governance index, the shareholding and compensation index is the most important determinant of dividend payouts. Our results support the complementary role of corporate governance and dividend policy of the firms. The implication from this study is that managers and board of directors should make dividend payout decisions in a big picture of corporate governance.

Suggested Citation

  • 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.
    • Handle: RePEc:eco:journ1:2020-06-4
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    References listed on IDEAS

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    Cited by:

    1. 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 -.

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    More about this item

    Keywords

    Dividend Policy; Corporate Governance; Agency Problem;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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