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Corporate integrity culture and dividend policy

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  • Sinha, Rajesh Kumar
  • Damle, Harshali

Abstract

We examine whether and how the corporate integrity culture affects a firm's dividend policy. Using a validated time-variant measure of firm-level integrity culture, we find that integrity culture increases firms' dividend payout: a one standard deviation increase in integrity culture is associated with an increase of 9.89 % of the mean dividend yield. We also find that integrity culture positively influences dividends through financial constraint and firm risk channels. Our study is robust to endogeneity tests, including an instrumental variable approach using state-level corruption convictions and organ donation as instrumental variables and difference-in-difference methods employing the global financial crisis and the COVID pandemic as an exogenous shock.

Suggested Citation

  • Sinha, Rajesh Kumar & Damle, Harshali, 2025. "Corporate integrity culture and dividend policy," Journal of Behavioral and Experimental Finance, Elsevier, vol. 46(C).
    • Handle: RePEc:eee:beexfi:v:46:y:2025:i:c:s2214635025000097
    DOI: 10.1016/j.jbef.2025.101028
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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