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Does national geopolitical risk shape corporate dividend policy? Empirical insights from emerging economies

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  • Nguyen, Manh Huu
  • Vuong, Giang Thi Huong
  • Phan, Quyen Gia
  • Nguyen, Trung Duc

Abstract

This paper investigates the effect of national geopolitical risk (GPR) on corporate dividend policy (CDP) in emerging economies over 2006–2022. CDP is measured through cash dividends, payout ratios, and dividend decisions. The results indicate that elevated GPR is positively associated with higher cash dividends, increased payout ratios, and a greater likelihood of cash dividend decisions. These findings remain consistent across a range of robustness checks. The positive impact of GPR is greater in nations with severe GPR, stronger creditor rights, or more robust shareholder protections, particularly on cash dividend payouts. Additionally, financially constrained companies increase dividend payments under heightened GPR climates. Further evidence suggests that GPR amplifies cash flow and earnings volatility, encouraging companies to adopt stronger dividend policies to reassure investors. Collectively, the results are consistent with agency, dividend catering, signaling, and bird-in-hand theories, underscoring national GPR as a key factor shaping dividend policy in emerging countries.

Suggested Citation

  • Nguyen, Manh Huu & Vuong, Giang Thi Huong & Phan, Quyen Gia & Nguyen, Trung Duc, 2026. "Does national geopolitical risk shape corporate dividend policy? Empirical insights from emerging economies," Economic Modelling, Elsevier, vol. 159(C).
    • Handle: RePEc:eee:ecmode:v:159:y:2026:i:c:s0264999326000878
    DOI: 10.1016/j.econmod.2026.107558
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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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